cfiapter-4; data sliariiig; case studies -...

A Study o f Management Practices ofM NCs in India

Cfiapter-4; Data Sliariiig; Case Studies

The purpose of the present study is to understand how various MNCs manage local

operations in India. Specifically, to observe the kinds o f practices they adopt; how these

practices are experienced and perceived by Indian employees; and finally, what is the impact

o f these practices on the commitment of employees’ which would, in turn, affect the

effectiveness of the organization.

MNCs from several countries have operations in India. While cultural differences between

European, American versus Indian organizations are expected, the general feelings may be

that Asian cultures have many similar ways of doing things or approaching a problem.

However, it has been found that even these cuhures are quite dissimilar. To get a fair

representation o f this corporate global diversity in India, one Korean, one .lapanese, one

Swedish and one Anglo-American MNC were chosen and treated as individual cases. The

names of the organization have been changed.

As mentioned earlier the following criteria were applied for the selection o f MNCs for the

present study:

“ Financially successful

■ Have a positive brand image

« Each represents a diverse socio-economic national reality

The following section has four case studies. Case 1 is A Anglo-American MNC; Case 2 is a Swedish

MNC; Case 3 is a Korean MNC and Case 4 is a Indo-Japanese Joint Venture (JV).

The case studies are organized in the following manner.

Each case study starts with the description of organizational profile, such as location, size, product,

and market. It also includes the early impression of the researcher in respective organizations.

Part n gives the details of employees’ reactions on various questions asked in the organization.

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Case Studies

Part III covers the perceptions of the employees on various practices taken in the present study.

One oi' the important issue emerged during the data collection was interaction with the expatriates.

Part IV deals with that.

Part V discusses the employees’ of the commitment towards the organization.

And, part VI illustrates the effectiveness of tiie organization, as perceived by its employees.

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A Study o f Management Practices ofMNCs in India

Case Study I: SH iidia

4J. Ail Anglo-American MNC in India

4.1.1 O rganizational Profile

SI«Internatioiial (pseudonym) is an Anglo-American multinational corporation (MNC) in

which the British partners are the major shareholders. It was created following a nisrger between the

British SP-International (pseudonym) and the American ID-International (pseudonym) in 1989.

The Indian operations were set up in 1958 by a team of British expatriates, as a 100 per cent

subsidiary of the then SP-International and called SP Milk Food Manufacturing Ltd. (pseudonym).

Even today, it is the majority shareholding British expatriates, rather than the Americans, who

represent the parent company management at Sl-India.

4.1.1 Location

4.1.1.1 The Head Office

Located in state-of-the art premises of a huge corporate house near Delhi, the HO has the best of

interiors. According to an HR executive, Sl-India’s head office (HO) and regional sales office (RSO)

layout is similar to that of SI-UK. A pantry provides snacks as well as hot aid cold beverages

(cappuccino, espresso, black coffee, tea) through vending machines. The doors to the pantry and the

offices are guarded electronically; only researcherized personnel can enter using an electronic access

card. An electronic surveillance system also keeps track of visitors, since they are not allowed to enter

the office area. Meetings, even among the managers, are held in the conference rooms.

4.1.1.2 Regional Sales Office (RSO)

There is one RSO each in the northern, southern, eastern, and western parts of the country. The

study team visited RSO (North), located in New Delhi. It has a pleasant and affluent look just like the

HO, with cubicles and an open office stnicture similar to the HO’s. It has well painted and well

maintained walls (no cracks, peeling paint etc.) and a pantry with self-service coffee/tea machines.

There are pictures and paintings showing the core values of SI and its products. The Regional Sales

Manager is in-charge here. Under him are area sales managers, business development managers, and

managers taking care of logistics, statistics, HR, information management, trade and marketing, rural

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A Anglo-American Case study 4.1

development, medical, coordination, and so on. Under them are the senior sales officers, sales

officers, professional practice trainees, and staff.

A Business Development Manager is the link between the sales office and wholesalers and

retailers, including, supermarkets. He keeps them informed about products and helps them in product

promotion. He also infuses a feeling of competition amongst the retailers and rewards the best

performers by arranging a short trip abroad for them. Retailers are provided with gifts for potential

buyers. Wlienever there is a slump in the mai'ket, a team of sales and retail personnel prepares a

scheme that goes to the regional sales manager. There are also regular meetings at the RSOs to sort

out recuri'ing problems maintaining a rapport with retailers. In all such activities, the RSOs have a

great deal of autonomy.

4.1.13 The Research Office (RO)

Tlie reception at the RO was not as impressive as in the other SI offices. It looked dull, and

aesthetically unappealing, especially in comparison to the HO, The overall look was similar to that of

any typical Indian office. Unlike the HO and RSO, it did not have an open office structure.

The RO is much less pressured by work and is smaller in size, with only 22 persons (compared

to over 100 in the UK Research Office). Its budget is small— less than one per cent of the turnover. Its

job is to make only minor improvements in the products to suit local conditions to enhance their

nutritional value. Activities here seem to be so marginal that personnel are often required to perform

some other managerial functions. Many contend that research expenses are meant more to save on

taxes than to engage in innovative research. Many feel that their activities are monotonous, in spite of

their capability to do innovative work. Monthly reports are sent to the parent company. Their

counterparts in UK are open to sharing information and reply fast.

Personnel here claim to have the capability of developing new products but are constrained by the

agreement with the parent company that requires even small projects to be approved by them before

they are undertaken and implemented. Unlike the HO, the RO has neither an electronic access system,

nor a pantry, nor coffee/tea machines. Peons serve tea and coffee. The persomiel sign a register when

they come in or go out, and unlike at the HO and RSO, nobody here is required to wear a tie.

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A Study o f Management Practices o f MNCs in India

4.1.1.4 Plant/Factory

Located in a small town in Punjab, the tactory runs three shifts of eight hours each, six days a week

with a rest period of one hour per shift. Its nine lines produce two health drinks. The plant is very

clean, airy, and well maintained. There ai'e trees and shrubs to give it a green look. The office layout

is different to the one in the head office. The reception counter is well maintained. However, there is

neither a visiting nor conference room, nor a pantry, nor coffee/tea machines. Efcpartmental heads

have cubicles and the staff sits nearby in an open office format, as at the RSO and HO. Some

department heads’ cubicles have glass walls so that officers may see their staff, enabling close

supervision and facilitating coordination.

As the plant is located in a rural area, not only workers but the managers also live in close proximity

to each other and tend to meet socially. Those without families are accommodated in a guesthouse.

As a result, workers and managers constitute a kind of a community — hierarchically structured with

personalized modes of relationships. Most of the workers are Jats and Punjabis, with a few workers

hailing from Uttar Pradesh (UP) and Bihar. Many of the older ones are illiterate with relatively poor

skills. Given their fai'ming background, a job in SI gives them status and prestige in their community.

Some of them have been working at the plant for over 35 years.

Thus, their castes, age, agricultural background, and an SI job have the combined effect of inflating

their ego and making them sensitive to how they are treated. They are rough and tough (especially the

Jats and Punjabis), work hard, but are unable to take kindly to all orders, particularly from young

managers. It is not uncommon to find a worker retorting to a young manager: “I have been working

here much before you were born.” To quote an instance, an officer had to apologize to a worker for

his not-so-polite behaviour — an event highly uncommon in Indian culture.

Overall, while the plant is managed efficiently with due consideration to quality and quantity of work,

interpersonal relationships on the job as well as off it remain cordial, personalized, and hierarchical

(see also, the section on Hierarchy and Decentralization).

4.1.1.2 Size

The total work force of Sl-lndia stands at 498 managers, 2840 workers at the plant, two British

expatriates, the Managing Director and the Vice President (Operations).

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4.1.1.3 Product Range

The product range focuses on consumer healthcare—a range of health food drinks for children (one to

three years, three to five years, teenagers); a health drink for those in the 55+ age group and for

pi’egnant and lactating mothers; antacid drinks; toothpastes and a range of toothbrushes.

4 .1.1.4 Market

Given the nature and application of the product range, Sl-India has a nationwide market that spans

both urban and rural areas,

4.1,5 Early Im pressionsWhen approached, the Director (HR & Administration) listened patiently, without asking for details.

He allowed the researcher 60 days to collect data and she was attached to a coordinator from the

Human Resource (HR) section. In order to get a feel of the place and make non-partieipative

observations, the researcher asked the coordinator from HR to make arrangements for her to sit

quietly in one place so that she could observe employees, in formal as well as informal interactions

with each other, without disrupting the routine.

The organization was not pleased with this request as it has a policy of not permitting visitors at

workstations. As a result, the researcher was not given any such spot from where to make her

observations and had to hang around the workstations to make observations. She set up appointments

on her own and also met employees over coffee and lunch, to build up rapport. As time passed, a few

employees approached her on their own and volunteered to share perceptions.

Unstructured interviews were conducted aroimd the main purpose of the study. Most questions

asked were meant to explore the nature of the relationship between Indian bosses and expatriates, the

structure of the organization, target orientation, decision-making, formalization, and

interdepartmental coordination, which was termed ‘boundarylessness’. Employees at all levels and

from all departments were interviewed in the office complex. Most interviews were held in the

conference/visitor’s room.

Perceptions about the role of HR practices were noted during interviews. Employees were asked

to share experiences in relation to non-work practices such as morning exercises, desk cleaning,

birthday celebrations etc.

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The following section discusses data gathered through observations and interviews and during

lieldw/ork.

Certain questions were asked to understand perceptions about the organizatbii and to build up a

rapport. (For further expansion upon information given in the tables, please refer to the hiferences

chapter.)

Ql. Compare your present job with previous jobs.

(Young executives and managers, who had never held a Job earlier, were asked to compare it with

the jobs their friends had in other organizations. Most workers have been in the Organization for 30-

40 years. Their comments, therefore, were of a general nature and all positive. These have been added

to Table-4,1.4 on Sl-India’s Strengths^.

T able-4J.l: M anasers Compare Workins atSI-India with Previous Jobs

(Note: Wherever there are no frequencies given in brackets, the frequency is one)

Positive Negative

My friends work under pressure of targets, whereas we focus on customer relations and build healthy relationships with the retailer and wholesalers. (3)

We have lot of paper work and transparency to maintain.

SI is much more systematic or systems-oriented with good HR policies, job security, and better salary. (3)

We miss the social network. We do not meet outside the office.

People are trained well here and respected with an emphasis on selfdevelopment. (2)

The previous company was more aggressive and result- oriented.

SI is more professional than other organizations. (4) Greater power and independence in previous company.

SI is more open and has two-way communication. (2) More interesting and dynamic job.

Induction training was good and made everything clear to us. SI is less research oriented(3)

The previous company had a casual attitude towards work and lacked method. SI has a system of weekly meetings.

We do a lot of planning before getting into action.

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A Anglo-American Case study 4 ,1

HRD liere, is more active—organizes get-togethers, seeks suggestions etc.

For R&D another company was perhaps better.

Good brand image. SI is a nationalized MNC as it lacks professionalism.

In SI there is no punishment for taking risk, in the previous company we were not spared.

Employees are treated nicely, (2)

Low turnover rate of employees in SI, (1)

Good atmosphere in SI/Sl is a better company, (4)It is very comfortable intei'acting with seniors at SI, compared to my previous company, (2)

SI has better woi'k culture, (2)In SI, everybody is involved in the decision making process.

SI is more quality conscious.

One respondent was asked to explain what he meant by a “good environment and good work

culture at SI”. By environment, the respondent meant good infrastructure. In his words, “I feel like

coming to office because of the nice computers and other facilities.” He also talked about the social

environment, “cooperative people. It is nice to work with them in a team. Whenever we have

problems our team suggests some solution for it,” Another respondent commented when comparing

his present job with the previous one, “I used to spare one day for myself in the previous company

since I have a field job. However, in SI, I work on Sundays too.”

4.1.2. ] Percevtions about the Merger

As discussed earlier, the SI merger took place in 1989. Employees, who were working since 1989 or

before, were asked to share experiences and feelings related to the merger.

Table-4. L 2 : Perceptions about the Merger(Note: Wherever there are no frecjuetwies given in brackets, the frequency is one)

Executives

Positive/neutral NegativeHad positive influence on work practices— Had to comply with directions coming from

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Simply bettei- way of working. (2) parent company, those were tough but we gradually adopted such practices i.e., calling everybody by their first name.

Changes in work practices—More emphasis on interaction, coordination with other departments, team work. (2)

No great impact; except that reports will go to parent company.

We call each other by first name because we are working in SI. (4)

Mainly senior levels were affected.

Culture has changed in terms of the way we addi'ess eacii otlier and good work practices. (3)Strong HR—more emphasis on training, involves people. (4)There was lack of transparency prior to the merger. (2)R&D had better exposure.More professional, process oriented. (3)

WorkersBi-ought about lots of improvement.Better quality.Greater emphasis on cleanliness.Workers are also given training after the merger.Now, departmental heads have more powers.Workers get better benefits & salary.Work efficiency and automization, (2)

As Table-4,1,1 reveals, most see positive changes associated with the merger. The researcher was to

that hardly anybody looked for a new job when the merger was on the cards, in fact some peof

remember being quite excited about it. The changeover was smooth. The researcher was told that the

Director-HR played a vital role in this. He addressed almost everybody at every location, satisfied

their queries and clarified doubts. The organization abo published a special in-house magazine to

address issues relating to the merger.

Overall, the merger is well accepted, A few changes, such as the sensitive cultural issue of addressing

each other by the first name have been accepted with a pinch of salt. The organization has moved on

to more streamlined processes but these processes are seen as causing a lot o f meetings to take place

and delaying decisions. However, changes in work practices have been appreciated.

4.1.2.2 Dependence on Head Office

The HO, RSO, RO, and plant are all located at different sites. The employees were, therefore, asked:

Q3, What is the degree of dependence on the head office?

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Table-4.1 J : Degree of Dependence on Head office (HO)

(Note: Wherever there are no frequencies given in Imickets, the frequency is one)

Positive/Neutml Negative

Regional Sales office (RSO)

It depends, if you are unable to complete the assigned task in the stipulated time, you get in trouble. Take sufficient time in advance.

Whenever we have a problem, we speak to the HR-manager at the RSO itselfWe do not have a day-to-day interaction with the HO. (2)

Research Office

Not much interaction except for the budget.

Plant

We are self-empowered. Budget approval is always tight.We have little interaction with the HO.

The regional sales office and the plant have autonomy in taking most decisions. “I am the boss in

my own teiritoiy,” said a senior sales officer, “I look after 640 retailers. I do not need to check with

the head office, unless a major policy decision is required. In that case the regional sales manager

does the needful.”

The HO approves the budget, requires monthly reports, and assists with whatever the plant

needs. E-mail and telephone help all locations to keep in constant touch with the HO. The heads of

departments at the plant report to both the GM as well as to their functional heads at the HO.

The GM-Plant said, “We report to the VP-Operations. We are dependent on the HO for the

budget, which is always tight. We are self-empowered to utilize the amount sanctioned. However, in

case of an emergency, the HO always supports the plant. It was also revealed that all Sl-India offices

have the leverage of incorporating local requirements while keeping in mind the company’s core

values.

Most employees have a positive image about the HO and its support to the plant. The following table

covers comments of the respondents regarding dependence on the HO. The people at the plant

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perceive the HO as an open foaim where anybody can meet anybody. One young respondent felt that

professionahsm was greater at the HO and he would like to be transferred there.

4.1.23 Identifvins Strensths and Challenges

Workers and executives were asked next about Sl-India’s strengths, and thereafter, executives were

asked about the changes they would like to see at Sl-India.

Table-4.1.4: SM ndia’s Strensths

(Note: Wherever there are no frec/ucncie.s given in brackets, the frequency i.s one)

ExecutivesIts people are hard working, (5)Product. (9)Quality. (4)Executives and workers commitment-employees have been there for 25-30 years. (6) ________________Employees are taken care /employee friendly company/ emphasis on training. ( 1 1 ) _______________ _______________________________________Customer driven company. (4)Brand image. (8)Team spirit towards common goal. (2)Decisions are based on consensus/free to express views. (2)Market share.Helps to maintain work-family balance.Employees are appreciated for their good work. (2)Suppliers paid on time.Good work processes.Adaptability to customer suggestions/open to new ideas. (2)Freedom to work/no interference from the boss except for some /breathing space. (5) ______ __________Professional approach/not too much bossism/performance driven. (3) People are not fired for committing mistakes. (2)SI culture-simply the better way/Its core values (discussed later). (5)Openness in sharing information.Good administration.Financially sound company.Cross-functional teams.Business focused.

WorkersQuality-driven,No cormption/honesty.Good hard working workforce/ workers.

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Positive.Follow government policies, etiiical.Tlie management is soft at SI.Worker-safety is the prime concern while production was the main concern in the pi-evious company. _______

Q5. What changes would you like to see at SI?

Tahle~4J.S: Executives on Preferred Clumses atSI-India


More managerial responsibility for sales executives.Sales executives should be involved in strategic planning.Individual growth is slow (safes executive).Style of selling: we are booking ready stock whereas we should opt for order booking like our competitors.More transparency at all levels, i.e., to know more about employee benefits.No discrimination between staff and managerial cadre with respect to benefits.Employees should be helped with family problems.Better technology at the plant/more automation.Satisfaction level of the staff.Operationalize the practice of calling by the first name.Employees should be given more responsibility (R&D).R&D should do more work on the technical front.Let’s have fewer meetings.Developing a better sense of team spirit.No change required/ do not see any fault. We have all the best practices, which we can improve upon. (4) ______ ____We should not be forced to wear a tie.Work innovation.Should he more aggressive/taking risk rather than being slow and conservative. (2) People should be encouraged to take risks.__________________________________Diversify products. (2)

They were finally asked:

Q6. How does your family feel about your association with SI?

All the respondents expressed their pride and happiness at being part of SI. Families felt happy and

proud due to the brand image of the company.

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4.1.3 O rganizational Practices

4.1.3.J Orsanizational Structure

Two concepts — ‘Open Office’ and ‘Boundarylessness’— emerged frequently in discussion and

appear to form tlie cornerstone of the SI Organizational structure. The way these concepts have been

assimilated by the employees impacts Organizational effectiveness. Effort was therefore made to

gather employee reactions on the same.

4.1.3.1.1 Open Office

The HO, RSO and plant have an open office structure: open cubicles with glass partitions. Only the

MD and directors have separate chambers. Others such as the GMs, senior managers, managers,

deputy managers, assistant managers, and the staff sit in cubicles. The HO does not have peons.

Besides the reception desk, there are small conference rooms where meetings are held and visitors

entertained.

Deliberate efforts are made to make people from different departments sit together for improving

interdepartmental coordination. There are nameplates at everybody’s desk. An interesting pattern in

the sitting arrangement was that everything was not visible. A Xerox machine is kept in a big hali and

everybody uses it themselves.

Table-4.1.6; Comments by Executives on Open Office


Positive/Neutral NegativeIts fine and everybody works like this in this company.

We all sit in an open office but all of us would prefer personal chambers.

We get to have a one-to-one interaction with the boss.It saves time. (2)

Observations of the open office seem to reflect a calm and comfortable atmosphere. An open office

facilitates communication but according to some seniors, does not allow privacy and time is wasted

going to a conference room whenever two or more people need to discuss something. People are also

vulnerable to unwanted visits by their colleagues and staff walking in just to say “hello.”

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4.1.3.1.2 Hierarchy and Decentralization

Sl-India’s hierai'chical structure comprises 14 levels from a permanent worker to the managing

director (MD). The position of Britishers in the organization is given in Chart-1 and the overall

hierarchy in hidia, in Chart-2 and departmental organizational structure is given in chart-3.

Chart-4.1.1: British-held Posts in Sl-India

M anag ing D irecto r V ice P residen t (O pera tions)

Managing Director

Vice President

Chart-4.1.2: Orsanizational Hierarchy Flow

Senior General Manager

General Manager

Deputy General Manager

Asst. General Manager

Manager

Deputy Manager

Asst. Manager

/(•n

r

Z'-

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A Study of Management Practices ofMNCs in India

Senior Executive

f \

Executive

Junior Executive

Senior Officer

Officer/Sirpervisor

Worker

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A Anglo-American Case study 4.

Cliait-4.1.3: Orgiinizational Structure of Sl-India.

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The organizational structure is decentralized. All the decisions are not taken at the top. Employees are

consulted and not bound to follow the hierarchy. In other words, the line of authority is not rigid.

According to one respondent, “The company has a channel to follow but we are not bound to follow

it.” According to a sales executive, “People can directly interact with a person, share any agenda and

solve any problem.” Seniors also delegate authority. Employees are fairly comfortable talking to

seniors. A professional practice trainee at the RSO stated, “Whenever I come to the office, I feel

good, because the infrastructure is excellent; fast computers, working in teams, cooperative people,

and freedom to do my work. Moreover, if I have a problem, I am free to discuss it with the area sales

manager and, if necessary, with the regional sales manager. I have to follow the channel but I can go

to any level.”

Matters are slightly different at the plant where a more traditional approach is seen to work better

in the worker-management relationship. Workers are told at the time of joining that if they have any

problem, they can talk to their immediate boss. If the problem is not solved, they may go further up,

even to the MD.

The GM is overall in-charge at the plant. Over 25 years, out of the 35 years of his long

association with the company, have been at the plant. He is highly respected and like a father figure.

Fie knows most workers by name, attends marriages and helps them in many ways. However, he

maintains the line of authority descending from him to the managers, deputy managers, assistant

manager, supervisors, charge hands, workers, and so on by discouraging them from approaching him

directly. However, some very old workers, whom he has known for years, talk to him directly.

The HR Head is called chacha (uncle). He too commands respect. However, there are some

junior managers who are disliked for their rough behaviour with workers. By the same token,

managers who are receptive to the ego needs of workers are obeyed more readily. These managers

mix with them fi'eely, offer tea when they visit, and introduce them as “very important” employees.

Some allow the bullying types to the use office phones to impress friends and relatives and even get

away with not more than five hours of work in a shift.

4.13.1.3 Formalization

Formalization can be understood in terms of clarity of policies, preference for written communication

and to what extent rules are followed. In case of Sl-lndia, these policies are clearly laid down and

written communication is preferred. There is, however, no rigidity about it and adjustments are often

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A Anglo-American Ca^se study 4.1

made. For instance, executives travel by economy class and top level managers travel by executive

class.

Most information—such as, “so-and-so will be on leave for two days”— is shared through e-

rnails or company intranet. There are instances, as told by an assistant manager, when seniors and

juniors had to travel on the same flight and the senior executive ensured that the junior travelled by

the same class as he did.

Thei'c have been instances when policies were ignored, such as in the case of two or three

couples working together in Sl-India, even though company policy states that spouses cannot work

together. Such relaxations are not taken in a healthy spirit, however. Some employees feel that it

reflects favouritism.

The overall impression drawn from the experiences of employees is that they have role

clarity, and are cleai- about policies. Rules and regulations are clearly stated and are followed

njost of the time.

At the plant most policies are followed most of the time, but not always. The plant had five trade

unions at one time, which caused a strike for 11 days which was dealt with “using sam, dam, dand,

and bheda ” (repressive tactics, monetary incentives, muscle power, and dividing tactics respectively)

said a manager. The union’s major role now is to settle wages and this decision has been readily

accepted.

4.1.3.1.4 Boundarylessness

SI has a mix of horizontal and vertical systems o f functioning. Instead of being segmented into the

hierarchical departmental structure, the emphasis is on cross-functional communication through

process thinking. To quote an example, for a project, there is a process-sponsor and a process-owner.

A proposal is submitted to the immediate boss who may share it with his boss. How high this sharing

process goes depends on the nature of the proposal, extent of coordination with other departments and

the required resources. The HR Department facilitates the formation of cross-functional teams and

meetings for interdepartmental coordination. Boundarylessness, a key concept at SI, is thus an

important dimension of the Organizational structure in terms of facilitating interdepartmental

coordination.

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Observations indicate tluit boundaryiessness exists moderately at SI, as people do feel that

“processes are not the only means to get the work done, and that personal relations did matter.”

Personalized relationships were seen to work at times to facilitate performance and, at times, to create

aberrations in the otherwise highly normative work culture prevalent in the organization. For

example, interdepartmental coordination is so streamlined that work gets done as a matter of routine,

but there are still some who would rather call a colleague to get it expedited.

“It is better to know who is the right person to contact and request him to get it done.” Similarly,

it is considered wise to have a good relationship with the personal assistant (PA) of one’s boss. It

helps in many ways. Another respondent said, “I have good public relations with other departments.

Therefore, in my department, I am asked to get the work done from other departments.” For instance,

the researcher was told about a manager in finance who delayed the work of an HR manager, because

the HR manager was not cooperating in the matter of signing some papers. One of the executives at

the RSO said that, “it is as if it is entirely based on personal relationships, but it helps to know the

right person for getting the job done faster.” Some noted, “Even if a person is right and knows what

he has to do, he needs to convince others by evidence and arguments. Documentation of evidence

becomes more important than speed in decision-making.”

The process, it seems to some, consumes so much of their time and energy that not much is left

over to think up innovative ideas that need intuitive decision-making and involve a high degree of

risk. One aspect that reflects the impact of both the Open Office and Boundaryiessness is that some

respondents alleged there were “too many meetings.” An instance: An executive, located at the plant,

was going to the HO for a meeting related to an ongoing project. He had no clue regarding the

purpose of the meeting. He said, “Most probably it is going to be a handshake meeting hke, oh! You

are also in this project.” Another observation, however, records one of the sales otTicers as saying,

“We have timely meetings to discuss our problems.” Some employees revealed that sometimes they

tend to take a person in confidence to support his views at the meeting.

Only one respondent felt inter-departmental relations were not dependent on personal

relationships, “it is our tendency to feel that if I do not know anybody in a department, my work may

get delayed or will not be attended to—so it is our mental block which says that having good personal

relations in other departments is a necessity.” Another respondent tried to explain why teamwork was

not so effective at SI. He felt it had more to do with cultural hang-ups than the organizational culture.

“Indians might speak like collectivists but they behave individualistically”, he said.

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4.1.3.2 Manaeement Style

A democratic and participative style of management prevails at SI. This was reflected at various

levels. Employees feel a sense of freedom during work, as they can take certain decisions on their

own. A senior sales officer said, “I am the boss in my territory except for major decisions.”

In order to gain insight about the prevailing management style the following questions were

asked.

Q1. What happens if you make a mistake?

The common pattern that emerged from the responses was they tried to find the reason behind it so

that they did not repeat it. But they were not scared about it.

Q2. What happens when you have a problem and approach the boss? How does the boss react?

There were mixed experiences relating to boss reactions but most employees were not scared of

feeing their bosses in such situations.

Q3. How long does it take to implement a decision?

Moderately long and it depends on the nature of the problem. Decisions are based on discussions.

Executives asserted that decisions were based on consensus and that, “We do not have a one man

show.” A GM was observed during his interaction with subordinates. He asked the junior whether he

had “gone through the papers”. The GM then gave a quick glance at papers and said, “If it is okay by

you send it”.

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Box-4.1.1: Particimtive Mmmeement Style


Executives Seniors take others viewpoints also.We have freedom to work and speak.There is transparency.Seniors do not chase us on a day-to-day basis when they assign a task.

Workers] can speak to anybody from the immediate supervisor to the GM,If our problem is not solved at the in-charge level than we go to a higher authority.

The same style percolates down the line. Supervisors speak in a polite feshion to workers. Permanent

workers do not try to boss over casual workers. Most workers do not find any problems

communicating with seniors. They mostly feel that the management is “cooperative” and “listens to

our point of view”. Some workers say that they are able to share personal problems with their

supervisor. A sense of trust prevails among various levels.

There are, however, a few instances where respondents expressed discomfort at the management

style adopted by seniors. Those instances reflect a cultural barrier between the seniors and

subordinates. An assistant ITR manager is not well accepted and the workers had told the HR-head

that they would not sit with him at meetings. Another instance reflecting a stressful relationship

between senior and his junior occurred in front of the researcher. A GM, irritated with his subordinate

for not writing something in the manner told, stiapped, “What stops you from writing it like the way I

told you to?”

4.1.3.2.1 Top Leadership

The British MD joined Sl-India as a management trainee in 1963, was thereafter given a promotional

tenure by the parent company and came back as MD in 1978. The Director (HR & Administration)

joined as Executive (Personnel) more than 22 years back. Similarly, the Director (Sales &

Marketing) has been working in SI since 1972. The Director (Legal) joined as an Executive (Legal)

in 1977. They have become role models for the other managers.

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The British MD mixes with employees and attends marriages in their families. He has a good

sense of humour and is a great listener. Once he assigns a job, he leaves it to the person to complete it

within the stipulated timeframe without botliering him for day-to-day details. He speaks some Hindi

too {jaiianidin mubaarak ho).

The Vice President"Operati(5ns Pritish) joined Sl-India in 1996. He does not maintain a

distance from his subordinates. He photocopies on his own, cleans his own coffee mug, carries his

briefcase, and so on. If he has a visitor in the conference room, he does not mind bringing coffee

himself He is often seen walking over to his secretai-y and talking to her, standing while she remains

seated. Like the MD, once he assigns a task, he does not interfere. He believes that Indians are as

effective as people of other nationalities. For example, he may leave a sensitive job, such as hiring,

entirely to his secretary. In the meetings he is more like a moderator or a participant than a boss,

though he does take final decisions if he has to. He is informal but straightforward. His subordinates

are free to visit him at his residence and brief him about matters that are to be discussed subsequently

in a formal way. He regularly visits the plant to check the housekeeping among other things. This is

done thoroughly but without interfering in the work of the GM. He is perceived or misperceived as a

suggestible person.

The Director (HR & Administration) is greatly respected for his human touch and nurturing

ways even as he coaches his subordinates. He invites them to his house and never claims credit for

their efforts and achievements. His subordinates have free access to him without any prior

appointment. He has learnt leadership skills from both British and Indian bosses. Flis British bosses

were “models of generosity, empowering, nurturing, result-oriented.” This showed him “how to

clearly distinguish personal friendship from professional relationships”. The Indian bosses were “hard

taskmasters, but caring, concerned about [his] personal growth”. They gave continuous feedback, and

shared ways of managing (e.g., speak in a different language to aggressive union leaders, speak their

language to motivate them. Just one way of speaking cannot address all problems).

Other directors and GMs are also informal and accessible to their juniors, though in varying

degrees, A trainee namited an experience with the Director (Sales & Marketing): “I was attending

an area sales conference where all sales and marketing officers were present, A man walked up to me,

put his hand on my shoulder, and asked how I was doing, I continued talking without realizing (I was

told later) that he was the Director (Sales & Marketing). I was thrilled!”

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The researcher had a similar experience. The Director (Sales & Marketing) was in a meeting,

but came out, introduced himself, and said that he would be sending his assistant to escort her to the

conFerence room where he joined her and granted an interview at length.

The HR-liead at the plant is also respected. According to a worker he speaks and discusses

things very nicely. Senior-level employees at the plant reveal that they have a dual reporting system.

One report goes to the GM (Plant) and the other to the VP-Operations (HO), The GM (Plant) said, “I

do not believe in giving orders. I respect situational sensitivity. Therefore nobody disobeys me.”

4, J.3,2.2 Perceptions: The Indian Boss

Most respondents’ feel Indian bosses needed to be managed. How SI executives handled their

bosses (both Indian and British) was an issue found worth exploring. It was observed that one of the

senior managers staying at company’s guesthouse was picked up on his way to work by his

subordinate although the company vehicle was there to take him to the office. It was observed that

Indian bosses’ repeatedly asked juniors why they had not been able to finish their job on time and

how much more time they needed to complete it.

The most common themes that emerged from the discussion seemed to be typical of the relationship

between Indian bosses and Indian subordinates. Interaction with Indian managers was perceived to

be a mix of good and bad. It was occasionally observed that managers used rough language

humorously, like “If you end up losing your job, it is your problem”. Such instances were greater at

the plant than other locations.

Box-4.L2; Comments on Indian Bosses

(Note: Wherever there are no freguencies given in brackets, the frequency is one)

® People try to impress the boss by words and actions, e Boost the boss’s ego.o Develop a personal relationship at the family level.® Ji-hazoori (“Yes boss” attitude),e Never reject the boss’s idea.® Say what the boss likes to hear.

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However, at all locations it was said that Indian bosses were more difficult to handle as

compared to the expatriates.

Table-4.1.7: Executives Comment on Interaction Between Indian Bosses and

Subordinates


PositiveA boss never threatens juniors. _____

NegativeIn India, a boss will never ask v/hetlier one is comfortable staying late in office.

Managers should understand the needs of the subordinates.They keep following up (after assigning a task).We have to keep informing our boss about everything.Do not get the time and chance to look after HR-related issues.Bosses have to be kept happy in order to get better tasks and promotions.Boss management is very important. (2)The Indian boss likes to be autocratic and discourages participation.________________________________________

The relationship/interactions of Indian subordinates and British bosses is discussed later in this

chapter (see 4,1 A).

4.13.3 Human Resource (HR) Practices

Human resource (HR) practices have been tailor made for local requirements, keeping in mind

the parent company’s core values. One executive affirmed, “The core values are operational and not

just on paper.”

The Director (HR & Administration) is very well respected and accepted. He interacts informally

across levels and is approachable. Workers like to listen to and speak to him instead of any other

director at Sl-India. In fact, he is one of the most respected figures in the company. One manager

said, “The HR Director is really a guru. He is very clear in his thoughts, has a good memory and has

immense knowledge not only in his subject but also in many other areas such as sports.” The Director

(HR & Administration) once told an HR executive, that he would like to “provide a good work

environment and a good living to the people at Sl-India”. Overall, employees feel cared for.

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Everybody punches time cards. Workers have green cards that they deposit while checking in

and reclaini while checking out. The time office marks their cards. However, employees at the

Research Office (RO) sign in on a register.

limployees are given interest free loans for a car, or white goods to help maintain their standard

o f living. There is a gym and a swimming poo! on the 11"' floor in the tower, which houses the HO

that can be shared by others in the building. Tiie employees use their facilities to exercise, relax, or

shed off stress. There is also a dispensary and a small HR library.

Cellular phones are given as per need and all marketing personnel have cellular phones. There

are limits on the number o f calls reimbursed. If these are crossed, personnel have to either explain or

pay for tlie extra calls. Workers at the plant are given earplugs so that they do not develop a hearing

problem due to the excessive noise on the production line.

Othei- HR activities include acts of charity in nearby villages and around the plant and in schools.

Town beautification, animal health, family weliare, are also on the agenda.

Regarding various facilities provided to SI workers the comments amounted to ‘satisfying and

good’.

4.1.3.3.1 Recruitment

The preference is to promote internally. According to the Director (HR & Administration): “W e grow

our own timber. We don’t want to lose the key managers.” There are indeed people at all rungs who

have been working in SI for 20-35 years. It may be the MD, the directors, workers, or even a driver.

No more than five to 10 per cent of the employees are inducted externally at the middle or higher

levels. The percentage is higher at lower levels.

Sl-India places emphasis on internal recruitment and cross-fiinctional exposure. In case of

vacancies, those interested apply tlirough their immediate boss. Information about them is passed on

for further assessment and close scmtiny. At the lowest level of induction are the professional

practice trainees who are recmited through campus interviews. A cross-flinctional team consisting of

personnel from various departments examines the candidates from different angles. The process for

promoting from inside, or inducting laterally is the same. Apart from technical competence, their

attitudes and disposition to work in a team and acceptance o f the SI culture are considered to be

critical.

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A A nglo-A m erican C ase study 4.1

If an employee has the potential to take up some task that may not be from her/hs core area

he/she is encouraged to move to the new work area. The HR manager was overheard congratulating a

colleague from HR who was offered a move to marketing. She had been advised to work in the

marketing department soon after her training.

Workers an; mostly local and recruited through interviews. Those who were hired earlier are

mostly illiterate. Now the minimum required qualification is matriculation. Workers are made

l^ermanent after ten years of service.

4 .1 .3 3 .2 Training

Those recruited for the managerial cadre are put through one year of rigorous training by the HR

department. The first tliree days are devoted to their induction. They interact with the MD and

directors who brief them about their respective departments. Emphasis is placed on free and informal

interactions. They get visiting cards and their otfice access card, which gives them the SI identity and

a sense of belonging. They are then introduced to the concepts of the corporate culture where the core

values, philosophy, leadership practices, and general introduction of the company is given.

Thereafter, they are taken to a resort for a couple o f days so that they are detached from the

company’s formal environment and live in a “neutral zone” to develop sldlls for teamwork,

communication, interpersonal relationships, and so forth.

They are also sensitized to their etnotional intelligence, leadership styles, attitudes, and so on.

Finally, they are sent to various departments, factories, sales offices, packing offices to understand

how people at SI function, about the systems and procedures and also to acquaint themselves with tlie

core values at SI. Most employees feel that induction training is good and makes everything clear to

the newcomer.

At the end o f every fourth month, trainees share experiences and observations o f the location

where they spent the past months. They are appraised about their progress, strengths and wealoiesses,

and the further training inputs that they may need. At the end of the year, trainees make their

presentation in front o f all heads and directors. Thereafter, they are taken into Sl-India on a

permanent basis.

There is a training calendar from which managers can choose modules in which they are

interested. Managers on an average spend five days per year for specific training. Some are also sent

abroad for training. An executive said, “Most training modules are useflil. Employees can choose

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A Study o f M anagement Practices o fM N C s in India

which ti'aining program they would like attend. Although we try to incorporate training experience at

work but certain amount o f follow up is required.”

One respondent said, “The first year o f training was an extension o f campus life and we were

sharing t!ie same house and living close by. I learnt a lot and received cross-functional exposure.”

4 .1 .3 3 .2 .1 .M entor and Buddy

During training, eacli trainee is attached to a m entor and a buddy. The m en to r is a senioi- person

with at least five years of experience. He may be a director, a GM, a regional sales officer, or a senior

manager, but he/she is not from the department where the trainees are to be placed. Trainees can

approach and meet the mentor in his office or home, on dinners, and at other formal or informal

occasions. Mentors are expected to attend some o f the celebrations at the trainees’ place.

Although mentorship formally lasts only for a year, the bond that a mentor and the trainee

develop continues informally for quite some time. The success rate o f the mentorship role is reported

to be around 70 to 80 per cent. One respondent recalled that his mentor used to invite them over to his

place. Another executive shared her experience with an expatriate mentor; “The mentor was able to

relate easily to Indian values,” she said and explained that when she was leaving for outstation

training her father was transferred and her mother would have been alone in the city. Though she

never asked for it, her British mentor understood the nature of Indian family obligations and

understood that she would not be happy or able to devote her attention to work. He took the initiative

and requested the Director (HR & Administration) not to send her outside Delhi.

A few did not enjoy such a comfortable relationship with their mentor. As per one executive, “I

hardly met my mentor more than five or six times.” Another respondent said, “My mentor did not

develop a personal bond with me.” However, according to another executive, “It was good cross

functional exposure.”

Besides a mentor, each trainee is attached to a buddy who is just a bit senior, with one to three years

of experience. A buddy is a friend with whom the trainee can share his thoughts, concerns, worries,

hopes, and whatever two friends share. A trainee can also seek suggestions in minor matters such as

taking leave, undertaking a project, handling a difficult assignment, solving personal problems, and so

on. The success rate of this role was reported to be between 80 to 90 per cent. An executive recalled,

“I used to visit my buddy’s residence frequently. He really helped me to adjust to the culture o f the

company”.

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According to a respondent, “Tiie mentor-buddy relationship has brought about informality

between levels.”

4 ./.3 .3 .2 .2 Training Workers

Workers are given training in first aid, good manufacturing practices, safety measures and

environmental protection. Those who are highly effective are identified to serve as role models to

other workers. Following training, they develop an action plan dubbed SMART.

S = Specific targets

M= Measurable performance

A = Achievable targets

R = Realistic

T = Time-bound performance.

This program is monitored for lie next three months to give them a feedback for further

improvement.

4 .1.3.3.3 Target and Perform ance Orientation

Targets are decided by the mutual consent o f SI-UK and Sl-lndia. Based on this, targets are

decided for each department and individual. Job descriptions for all positions, even at the lowest

levels, are codified. Managers have to have an action plan and are delegated authority to perform

accordingly. They are accountable for goal achievement. This includes not only realizing targets, but

also learning to take care of the core values (as established by Sl-International) in their respective

areas of personal responsibility.

The annual target is broken into weekly targets for the sales team. Sales managers meet weekly

to take stock of target-realization and to explore if there is scope for improving sales further. Quite

often, sales people get overloaded with work. If a person accepts an assignment, he has to complete it

within the timeframe. He might say ‘no’, to accepting the task but there does seem to exist a nonn

that people do not say no and hence get overloaded with work.

Monthly targets are seen as “creating pressure” on the sales people. Those who fail to reach the

monthly target tiy to make it up next month so that annual targets are realized. Despite such efforts,

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Study o f Management Practices o fM N C s in India

sales targets moiy not be met and the pressure on the sales offices remains intact. However, most

employees do not feel the pressure on a daily basis. Seniors do not put pressure on their subordinates

to achieve targets. Some imnagers feel, “SI is not a task or result oriented company. We are process

driven. We have to give reasons for not achieving targets. And if we have followed the laid down

[i.e., right] processes, we are still likely to get our bonuses.” According to one of the directors, “result

orientation” is to complete the job in time to the best of one’s abilities.

Workers also feel that they are not pressurized to achieve targets. According to an operator, “SI

follows soft and easy means to achieve targets.”

4 .1 .3 3 .4 Perform ance Appraisal System

Appraisals are made annually. The procedure is quite transparent. It involves both qualitative as well

as quantitative criteria. Appraisals are shared and discussed. Managers are appraised with reference to

the core values and the ratings linked to compensation packages. Employees are trained to undertake

performance appraisal. Promotions are time bound. However, there are instances o f quicker or slower

promotions depending partly on performance and partly on the discretion of the seniors.

Workers are evaluated by their supervisors and finally by the heads. Those workers who are

rated good in technical know-how, arithmetic, and work performance are promoted as charge-hands

who supervise and yet are like the friends of workers. Not many employees express dissatisfaction

with the appraisal process. One young executive said that, “The discussion part was not very intense

and the ratings were at the discretion of the seniors.”

Box~4.13: M anasers/Executives on the Performance A ppraisai System

(Note: Wherever there are no frequencies given in brackets, the frequ en cy is one)

® It is both Qualitative and Quantitative and the matter is discussed between the boss and subordinate to arrive at a consensus.

® Our Peribrmance Appraisal is quite open but it could be better as personal biases do leave their impact.

® Performance Appraisal determines reward and recognition.

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Appraisals and promotions, despite their procedural fairness, seem to be affected to a certain

extent by personal equations. Employees at the same level, whether their workload is greater or

smaller, are likely to go through a similar appraisal procedure. Some seniors do grant patronage to

toyal suboi'dinates,

4.1.3.3.5 Compensation

Casual workers are paid daily wages. Bonus is fixed for workers and the staff but is variable for

managers depending on company performance. One executive commented, “HR is doing a good job

in terms of compensation but there is a scope for improvement on softer issues.”

The annual bonus o f round about one to 20 per cent of the basic salary — depending on the

perfoi'mance o f the company and individual pei'formance — is statutory for managers across the

board, and is given on the eve of Deepavali. Worker increment happens as a part o f the settlement

after every three years.

4.13.3.6 Prom otions and Incentives

These are based on perfonnance. One sales executive said, “I am credited for my efforts through

incentives, and appreciation which was missing in the previous company.” However, a few

employees feel promotions are based more on the opinion of the boss than on performance alone. It is

also felt by some of the male staff members that female employees are favoured over males.

However, when this issue was investigated it was found that it was mainly related to a few individual

experiences and also to the cultural hang up which makes it difficult for an Indian man to accept the

fact that women are getting better work opportunities and promotions over him. Indian men tend to

justify such instances by doubting the morals and character o f the women. However, for any

grievances employees feel comfortable to go to the HR section.

Monthly site team meetings, in which the GM and all departmental heads participate, decide

which worker is the ‘employee of the month’. The man gets cash up to Rs. 500 for dinner at a place o f

his choice. After completing 25 years of service, workers are presented with a wristwatch.

4 .1.3.3.7 Suggestion Schem e

Employees are encouraged to give suggestions. When the scheme was launched each and every

idea was rewarded, whether it was implemented or not. Now only those ideas that are accepted are

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i-ewarded. Suggestions are sent to a suggestion committee, wiiich evaluates and sends the idea to the

concerned department.

According to a respondent, a junior level executive suggested that sugar pills be used in the

pantry instead o f sugar cubes, as this would help to save costs. The idea M as evaluated and the

executive received a monetary reward and appreciation for the idea. One sales executive said, “We

can give suggestions over the phone too.”

Workers also actively participate in the suggestion scheme. The HR personnel see to it that the

workers’ suggestions about food etc. are implemented to the extent feasible. Small rewards such as

biscuits, pen, torch, etc are given for giving suggestions.

4.1.3.3.8 Open House

Employees raise common issues at an Open House. The platform is chaired by the GM (Plant)

and attended by the staff and all executives. It takes place once every three to four months. However,

this platform is only moderately effective. Mostly employees raise very elementary issues relating to

physical infrastructure and avoid talking about complex issues.

In order to synergize teamwork, communication channels are multi-lateral and streamlined to

enable managers to share information and support each other to ensure smooth ilmctioning. The open

office enables managers and staff to interact face-to-face, meet freely without any time loss, and feel

part o f a collective. E-mail facilities are provided to all. This economizes on time as they mail the

person in the next cubicle instead o f engaging in small talk before coming to the point. A great deal o f

emphasis is placed on sharing information, documenting evidence, and articulating one’s views while

taking decisions.

4.1.3.3.9 Welfare Activities: Transport & Canteen

Parking was common for staff and executives but separate for visitors. The company rims four

buses for employees and charges Rs. 400 per month for their use. Most workers come to the factory

on bicycles. Managers are given a car or a conveyance allowance; the VPs and GMs get chauffer-

driven cars. Company drivers are required to wear a white uniform although it is not compulsory.

Interest free loans are advanced to those who are not provided with a company vehicle. The loan has

to be paid back in five to six years.

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Facilities are provided according to the stature of the employees. Whilst on tour, however, if

tickets are not available in economy class executives can opt for business class.

The canteen runs on a contract basis and employees are charged Rs. 200 per month for mess

facilities. Food at the HO is sumptuous, while food at the plant is simple and primarily prepared

keeping in view the needs and expectations of v*/orkers, as told to us by an HR executive at the plant.

Workers were asked about their perception of the food served in the canteen. Most feel that it is

“averagely good”. In other words it is OK.

Expatriates eat Indian food with Indian employees, although they sit with the senior managers. The

plant has a canteen where both managers and workers can eat lunch, except that seating arrangements

are separate. Many managers, including the GM and some staff, go home for lunch.

4.1.3.3.10 Leave

Permanent employees can avail 45 days o f leave, which is more than what SI units outside the

country get It is not difficult to get leave provided an advance request is made to the head. In fact,

leave is granted in case of urgency on a phone call.

The factory runs six days of three shifts, each eight hours long, including an hour for rest. Department

heads have a half-day off on Saturdays. Absenteeism is high during the harvesting and marriage

seasons, as well in January and February when people collect tlieir leave travel allowance (LTA).

Now, the rides are being changed so that LTA is disbursed in instalments through the year.

The turnover rate is very low, but is increasing among the new young professionals. One

employee, who had been 19 years with Sl-India, revealed that when he joined he felt he would not

stick with this company and would leave as soon as he got another job. As time passed his seniors

understood him and he was given work that interested him. Then he realized that he should stay with

the company and now he looks back on this as a good decision in terms o f growth in personality as

well as professionally. “My senior observed my interest in computers,” he said, “and the next thing I

knew, I was shifted to the computer department, I have grown both personally and professionally,” he

said.

The reasons for his staying back with die organization were the good environment and salary.

There were many employees who joined at a junior level (as clerks) and gradually grew with the

company and now work as officers. Because of good pay packets, being local and pampered to

certain extent, the turnover rate among workers was almost zero.

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A Study o f Management Practices o fM N C s in India

However, young employees were asked, “Would you leave this job? Why?” (As many

employees have already been working with the company for the last 20-30 years this question was not

put to them). It was found that young professionals are open to the idea of changing jobs. The reasons

given are a better portfolio and work satisfaction. It is especially true for the RO and marketing

employees.

4.1 .3 .3 .1J Overall Perception o f H R

The overall impression seems to be mixed and skewed towards the positive side. One respondent

gave “75 marks out of 100 to HR initiatives and its role in the company.” Another employee rated,

“HR as 2.5 on an effectiveness scale of five.” It was observed that the role o f the HR is very effective

at the HO but not so impressive in other locations. Some HR-related employees are dissatisfied with

their role. “If an HR trained professional is asked to monitor the lights, cleaning operations or any

simple administrative task, he/she would be likely to experience a state o f under-utihzation.” Also,

HR executives posted in logistics or finance are likely to feel a similar kind o f under-utilization.

Another respondent clearly stated, “HR does not have any major role in the set up.”

A contradictory view was put forward by another colleague who said, “It is not that there is no

role of HR in the growth o f employees. HRD may not be doing anything to innovate, but they are

definitely following laid down processes.” Some employees, however, feel there is discrimination in

the treatment o f managerial and staff cadres. For instance, staff is given a five per cent salary raise as

compared to managers, who are given 10 per cent.

4.1.3.4 N on-w ork Practices

Non-work practices comprise those activities expected to be performed by all, by virtue o f being

members o f the same organization, and may not have any direct relationship to work. Non-work

practices include involvement in social events; how to address each other, and recreational activities,

among others,

4.1.3.4.1 On a F irst N am e Basis

The MD is addressed by his first name because he is an expatriate and has been insisting on it.

Most colleagues and subordinates are, as expected, addressed by their first name. Some seniors are

also addressed by their first name but only by their immediate subordinates. Many still feel

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comfortable using “sir” for seniors. At the Regional Sales Office and the Plant, seniors are routinely

called “sir”. The Organization suggests the preferred use o f first names but leaves this to the

discretion of individuals.

Table-4.1.8: Executives on Addressins Everybody by the First Name

(Note: W herever there are no frecjuencies given in brackets, the frequ en cy is one)

Positive/Neutral NegativeWe address each other by the first name and are encouraged to do so.

We do not address our seniors by the first name.

We address seniors who one or two levels up, by their first name. (5)

It took me two or three years to adjust to this, I still feel odd addressing everybody by their first name._________

It was difficult/odd in the beginning, but { am gradually getting used to it. (3)Now it is fine and makes an interaction informal.

A manager shared the following experience: “A few years back it was decided at a workshop in

die US to address each other by the first name. It was meant to create informal relationships to

facilitate teamwork, sharing o f information, decision-making, and so on. As soon as the participants

came back here, their senior manager said, ‘It was all right to call each other by the first name in the

workshop. Now we are back on the routine. So, this is not an issue. Do as you like.’ ” A junior

manager concedes: “I still feel odd addressing my seniors by their first name. They are my father’s

age.”

This practice is not followed at the plant because it is realized that workers would not respect

seniors if they addressed them by the first name. The researcher was told that this practice was more

common within the managerial cadre. It was told that staff level employees are not encouraged and

even scolded if they followed this practice.

A senior level executive made an interesting statement, “Imagine a new youngster calling the

giant figure [the MD] by his first name!” Another similar comment, which reflects our cultural hang

ups, was made by a deputy manager who said, “How can a peon be expected to address the MD by

his first name?”

At Sl-India, therefore, calling each other by the first name is an expected value or practice but not a preferred one.

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4.1.3.4.2 Dress Code

Executives at the HO and sales offices are expected to wear a tie. Overall, it may be said that

non-work practices are not imposed iipon on the executives. The MD was overheard saying, “If you

do not feel hke wearing a tie, don’t. But do wear it only for meetings.”

Both permanent and casual workers have khaki trousers and a white shirt as their uniform. They

also wear a white cap/turban and lab coats. Workers get free uniforms (four sets for two years).

Fridays are considered ‘casual outfit’ days. However jeans, sports shoes or T-shirts without a collar

are not allowed. However, sales executives, who remain in the field moat of the time, have no need to

worry about such codes.

Also observed: at the plant, employees are not so particular about wearing a tie and formal

outfits.

4.1.3.4.3 Tea/Coffee Self-service

Everybody is expected to serve tea/coffee himself or herself (except the VPs who have tea and

coffee sei-ved to them) and clean their mugs themselves. Most executives drink coffee/tea at their

workstation. Many serve themselves, however the researcher noted one manager's preference for

having tea served at his workstation. At tlie RO and plant, peons serve tea/coffee. Managers wash

their own glasses or coffee cups before leaving in the evening. As soon as litter appears anywhere it is

dealt with promptly.

4 .1.3.4.4 M orning Exercises

There is no morning exercise regimen at SI. However, the company offers the use o f a gym and a

swimming pool at the building which houses the HO. Nobody is forced to do anything and most

executives show little or no inclination to use these facilities.

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4.1.3.4.5 B irthday Celebrations

Birthdays are celebrated at 5 p.m. and the company pays for the cake. No such celebration takes place

for workers. This seems to be a wise policy as most workers are from a rural background and would

not be able to appreciate such efforts. The basic idea behind birthday celebrations is to spend some

time together.

According to many, it is just a ritual. One executive said, “Birthdays are not celebrated in high

si^irits.” It was found that a few departments did not celebrate birthdays. Celebrations are postponed

in case the departmental head is out of station. In one department only a card is given, signed by

everybody. An executive said, “We do not celebrate birthdays at all.”

4 .1.3.4.6 Family G et-togethers

Sometimes a cricket match is organized between the HO and the plant for the employees. In the

get together the atmosphere is perceived as being veiy friendly and casual. According to a respondent,

“Seniors are casual at such parties aiid don’t discuss business”. At the plant, facilities for outdoor

games are available to staff and managers and their families. Picnics and games used to be organized

tor workers but have been discontinued.

Employees’ families are invited for an annual party. At other times, family get-togethers are

organized by departments in a hotel to make employees and their families realize that they are part of

the Sl-hidia family or that “St-India is an extension o f their family”, as put by an HR executive.

Expatriates are perceived as being participative on such occasions.

The plant celebrates Lohri and gives a holiday on Basakhi (both local festivals). This validates

that Sl-International does respect local realities and modifies practices for their sake.

4.1.3.4.7 O ther Inform al Interactions

Most respondents revealed that managers visit each other socially. However, this interaction is

restricted to people of the same level. At the plant, juniors visit seniors at their residence and

exchange views and preferences about personal as well as organizational matters. Workers still

maintain the traditional type o f relationship. A Bw touch their senior managers’ feet and seek

guidance in personal and family matters. At times managers use workers for personal errands too.

There is a tradition of helping each other in exigencies. In one instance workers donated blood for the

daughter of one of the managers.

130


One of the respondents, during an informal interaction with the researcher threw light on a very

significant dimension of the use of the ‘language at the workplace’: “Once I leave the office premises

I would like to speak in Hindi. I get tired of speaking English.” It was observed that while people

mostly used English, in informal interactions they were observed speaking in their mother tongue,

such as Bengali. As one manager put it, “Hindi is so rich that it is difficult to find an appropriate translation in English.”

4.1.4. Interaction across International boundaries

4.1.4.1 Interaction with Expatriates

It was felt necessary to understand employee perceptions about the British expatriates working in

India, keeping in mind cultural differences. Respondents, both executives and workers, were asked to

discuss their relationship with the expatriate boss/es.

Table-4.1.9: Executives on Interaction between Indian Subordinates and Expatriate

Boss/es


Positive NegativeHave no ego hassles. They are result oriented.Display no objection to meeting people from any level of the hierarchy.

They mainly interact with the seniors.

Do not expect juniors to stand in their presence.I have learned two things from expatriates: be punctual and learn to say no.Give any amount of autonomy as long as the task is done.Think about the development of people, are polite.Professional approach, punctual.Do not expect to stay late in office.MD can speak Hindi.Expatriates focus more on cleanliness and responsibility. |

Expatriates are seen as being more professional in their approach. Their style, according to a

director, “is to let you do thiigs yourself with lots of freedom.”

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A Anglo-American Case study 4.

Iiuiiait bosses, on the other hand, were seen to:

® Insist on providing close guidance and direction.

® Always show you how to do what.

» Believe in protocol/hierarchy,

e Waste their time by talking too much.

9 Rarely stick to the agenda in a meeting.

0 There is a wide gap between what Indians profess and actually do.

® They are more concerned about what other people will say, than what is right.

Data were further analysed under the heading of Task and People orientation.

4.J.4.J.1 Task. Orientationi) Knowledge and skill

ii) Controlling Orientation

iii) Action Orientation

iv) Formal Work Practices

4.1.4.1.2 People Orientation I) Personal Characteristics

ii) People Orientation / Infonnal Interactions

vi) Local View on How Expatriates Perceive Them

4.1.4.1.1 Taste Orientation

i) Knowledge and Skill

A majority of respondents perceive British expatriates as having excellent technical Icnowledge

and being quality conscious. A senior level executive, however, said, “their knowledge and basic

fundamentals are nil. They are paperwork oriented. However, it is enjoyable working with them.” The

Director (HR & Administration), while comparing the managers of different nationalities, observed:

“Indians are academically more qualified and more comfortable with English than their South-Asian

counterparts. They are potentially as good as the British, but they need to put in more hard work and

improve their emotional intelligence and capabilities to manage global networks before they can be

considered as world class managers.”

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/I Study o f Management Practices ofMNCs in India

According to most executives at the Research Office colleagues from UK are professional, open

to sharing information and do not harbour a superiority complex. An employee said, “The expatriates

have regard for our competence and trust us”. A few expressed displeasure over the “excessive

queries asked” before making sanctions.


Tins is hardly seen in an overt form. They are perceived as a people who delegate work with

faith in their colleagues. The British expatriate’s style, according to one Director, is to let you do

things yourself with lots of freedom. Another director said it was, “cjuite easy to work with them.

They are focused.” Indian bosses are seen as people who insist on providing close giidance and

direction; tending to “always show you how to do what”.

Hi) Action Orientation

They are seen as being more people oriented than action oriented, while still being professional

in their approach. Most executives revealed that expatriates were appreciated for discouraging

everybody from sitting in office after office hours, emphasizing the need to complete the task within

office hours. However, Indians (as per respondents) seemed to cariy a sense of “over responsibility”

or felt “over committed”. One executive summed it up: “they put themselves to trouble needlessly”.

Expatriates were seen as not being so over committed but more efficient and organized, as told to us

by a respondent.

According to a senior manager, what Indians need to learn from the expatriates is to say “no” if

they do not agree with their seniors, be punctual, and restrict themselves to work during working

hours only.


The British are posted at senior levels and enjoy a double salary. Being a quality conscious they

are concerned about the quality audit. Some efforts were made to transplant the culture of the parent

company like open office, similar interiors, concern for people and performance. However, parent

company practices are not imposed upon the Indian executives, such as addressing seniors by their

first name, wearing a tie, and so on.

4.1.4.1.2 People Orientationi) Personal Characteristics

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The British, are seen as being Pussy about cleanliness; also, according to many, “they have never

shown any superiority complex but we tend to carry an inferiority complex within ourselves”. An

older executive noted that, “one beautiixd thing about expatriates is that they are clear in their

tliinking, honest and accept when they do not know something, they openly share their own

weaknesses”. Another respondent said, “the expatriates are good, frank, do not hesitate to say no and

do not delay work processes. They stick to their commitments”. Indian employees, both executives

and workers, carry a positive image of British expatriates. Workers greet and look upon expatriates

like heroes and perceive them to be superior to Indians,

ii) People Orientation/Informal Interactions

The British are seen as being informal and having a reaciy sense of humour. They participate in

Indian festivals and tiy to learn Flindi, Speaking of his senior British colleagues, a director said it was,

“quite easy to work with them. They are more focused, I have a good personal relationship with them

and experience a personal touch.” He felt that an Indian boss would never show as much concern as

the expatriates displayed. He added, “Indian bosses believe in strictly maintaining protocol.”

The British are also seen as being respectful of all. When an operator went to an expatriate’s

office tie latter left his chair, stood up and offered a stool. This was deeply appreciated by the

operator, since he felt an Indian boss might not have done the same.

in) Indian View on How Expatriates Perceive Them

According to Indian executives the British trust Indians and are open to sharing information.

Most respondents felt that the British respect Indians for their hard work.

In order to understand the relationship in depth, the executives were asked to share experiences

about the parent company. Sl-India, like other SI subsidiaries worldwide, has vertical linkages with

the parent company. The parent company has deputed a British MD, and a British VP (Operations)

(see chart-4.1.1).

4.1.4.2 Relationship with Parent Company

Being a fully owned subsidary, the parent company is involved in all strategic decisions taken at SI.

Reporting systems are uniform for Sis al! over the world. Practically, all major directions regarding

targets, quality, budgets, and so on come from the parent company. However, it is one of the policies

134


of the parent company to incorporate the country’s imperatives while taking major decisions about

them.

The parent company does not interfere in the day-to-day local operations or issues, Sl-lndia is

expected to keep the parent company up to date. They also share information related to the RO and

successful marketing or sales strategies. However, the Sl-India RO team feels frustrated with the state

of affairs.

Purchasing and marketing are moderately influenced, and HR, although guided by the corporate

culture of the parent company, is entiiely managed by the HR department at Sl-lndia, The parent

company regularly helps to modernize the plant and machinery and add production lines. It provides

continuous RO support to improve products. A number of systems and procedures have been

transplanted from the parent company, including cross-functional communication through process

thinking (as discussed in the section on boundarylessness) and quality check.

4.1.4.3 Quality Check

Concern for quality is very high and the production process is very well streamlined. All raw

materials—milk, cereal, water etc.— are checked at every stage by the Quality Assurance Department.

Quality audit involves the following:

4.1.4.3.1 Se lf Audit

A cross-functional team of two to three persons, (one from the Quality Assurance Department

and the remaining from departments other than the one whose quality is being audited), monitors the

production process.

4.J.4.3.2 Internal Audit

This is an audit of every procedure and is conducted by the in-house Total Quality Management

(TQM) team annually to revalidate the ISO 9002 certification. A British team used to visit Sl-India

for a quality audit till a couple of years back. The Sl-India audit team is quite strict, but understands

Indian imperatives.

135


4.1.4.4 Information Sharing

Employee experiences are shared globally through national SI newsletters. Ail relevant information

about SI companies at different locatiojis in the world is available online through a global software at

the parent company. Any SI personnel can log in and look at the latest information on production,

quality, and so on for any SI unit.

The Indian distribution system is taught in China, Singapore, Middle East, the UK, and the USA.

An hidian manager was sent to UK for sharing the “best practices’ at the plant with managers from

other countries. Similarly, when an advertisement of a company product proved successilil in

Germany, it was shared with all SI country units.

SI-UK has formulated two state-of-the-art enterprise resource-planning (ERP) packages that are

available to all Sis. Indian managers are posted in other countries and Indian managers often go to the

parent company to meet managers there.

TaUe-4.L10; Indian Executives on Intemctiom with the Parent Company


Positive NegativeThey are more open. The British have a superiority

complex.Transparency is maintained at all levels.

They are very formal.

An Indian could visit their R&D section.

They are private people.

Invite Indians home and ensure they do not feel left out.

Power politics exist in UK i.e., back-biting. But these are cultural issues not related to the parent company.

Learnt through experiences.Respect our hard work.Disciplined.Meetings are time-bound and focus on agenda.People enjoy life over weekends.

A majority of respondents perceive British expatriates as having excellent technical knowledge

and being quality conscious. They readily participate in Indian festivals and try to learn Hindi.

According to a senior manager, “what Indians need to learn from the expatriates is to say ‘no’ if they

do not agree with their seniors, be punctual, and restrict themselves to work during working hours

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A Study of Management Practices ofMNCs in India

only,” More or less, Indian employees carry a positive image of the British Expatriates and perceive

them to be better than Indians,

4.1.5 Organizational Cominitment

Most employees feel SMndia is “a nice place to work in” an organization which considers human

resources its most important assets — employees feel taken care of and respected, the organization

displays no arbitrary hire-fire practice, people are well mannered, and, of course, the culture is an

open culture. In general, employee loyalty toward this organization is therefore high, except for the

young professionals who consider the present job as a stepping stone toward better job opportunities.

The top-level executives appear to have won the trust of most, if not of all. The MD is respected

but also seen as an employee of the company and not its owner. Overall, there’s not much deviation

from the parent company culture. Top executives, especially the MD and Director (HR &

Administration), are perceived as being concerned about the development and career growth of the

employees. Some employees do feel that there are biases in granting promotions or relaxations but

these employees are the exception rather than the rule and overall it is believed that the organization

does not encourage such practices.

‘Association with the organization’ is largely based on the tangible and Intangible benefits

offered by the organization, One employee said, “If you ask me, I just remember the pay

cheque titat I get every month.” However, another executive revealed that, “! was offered

double the salary but I refused to leave SI.” Another executive said, “I joined SI for the money

but later realized that the job portfolio was Indeed good. My expectations at joining SI were pay

and culture, which were fulfilled.”

According to a deputy manager working for the last six years: “SI is like a /a/c-company as we

take money in advance from the purchasers But [unlike a lala company] SI spends its resources on

developing people and technology.” According to one respondent, “If I felt like changing my job I

would first try at SI, then anywhere else.”

One of the reasons for low employee turnover rate was that in comparison to other companies SI

seems to be the best option. An HR executive shared that some former employees would like to rejoin

SI. It seems that after comparing SI with their present company, they realize what they have lost. As

137


mentioned earlier, the younger generation is open to the idea of a job change. When it was explored

one of the younger managers said, “Gone are the days when people were wed to the organization”.

Secondly it is difficult to satisfy everybody 100 per cent, according to an HR-executive. They

share the commonly found perception that if you stick with one company your market value tends to

go down. Furthermore, a few young managers also feel that their services are not fully utilized, as

they are also required to do administrative jobs, supervise housekeeping, and perform other routine

functions. Young managers expressed their desire ibr a standard of living, which is very costly.

Therefore, a better salary anywhere would attract them.

SI definitely rates bettei- than many MNCs operating in India. Employee identification with the

organizational goals moderately exfets, as most of them are concenied with the benefits

associated with the ssssociatioa with the company.

There seems to be a feeling of trust in the organizational intentions towards its human resource

and in return some employees display a sense of ownership towards the company. It is culled out

from the overall data that there is a sense of calm among the employees who appear relaxed and

comfortable.

The status of the employee commitment towards the organization can be conceptualized as

a relaxed calculative commitment with trust/security.

4.1.6 Organizational Effectiveness

Oi'ganizational Effectiveness (OE) is conceptualized as promoting and developing people.

Many respondents defined OE in terms of ‘right people at the right place.’ One respondent said,

“SI is a good example of an effective organization like Infosys.” A few talked about delegation and

empowerment of employees and also about the emphasis on the result orientation. Some employees

pointed out that the means and the end, both are important, however means are more important than

the end, Sl-India was perceived to be more means oriented than end oriented.

According to the Director (HR & Administration), “SI could be rated as ‘middle road’ on the

grid scale. It has good systems and processes. The organization is successful in terms of achieving

138


targets, profits, brand image and cares for its people. Sl-India does not have an aggressive marketing

|)olicy nor a hire and fire policy. The organization was found to be low on risk taking ability, and

averse to diversifying their product range, banking on the success and brand image of the existing

products.

According to many respondents, a major dimension of OE is people and the focus is on the

gi'owth and development of the individual. Employees feel individual growth happens along with

organizational growth at Sl-fndia. Anodier parameter is the potential to grow. Most employees

perceive Sl-lndia as moderately successtlil in this dimension, as discussed in the section on

organizational commitment. Another OE parameter given by the respondents was the shareholders

viewpoint, such as responsiveness towards the consumer needs.

The only flaws found in Sl-India were:

i) Risk-aversive behaviour, and (probably stemming from that),

ii) No diversification of products.

It is felt that the organization is being “slow and steady”, which is not the sign of an effective

organization in the long run.

In sum, the present organization is found effective from the HR point of view and

ineffective from the rational goal point of view.

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/i Study o f Management Practices ofMNCs in India

Case Study II; AL-Inclia

42 A Swedish MNC in India

4.2,1. Organizational Profile

AL-India (pseudonytii), a subsidiary of the Swedish company AL-International (pseudonym), came

into being in 1995 with the acquisition of equity in three leading Indian consumer products

companies: AL-Decor (58 per cent share), AL-Enson (74 per cent share), and AL-Amtaz (100 per

cent share, i.e. Hilly owned). According to the Assistant Manager (HR), “All takeovers were very

smooth. Swedish companies are known for this.” This will be discussed later in a following section.

The parent company provides capital, the latest technology supported by continuous R&D activities,

and systems and processes that draw from AL’s global practices. AL-India consists of three legally

separate entities. Therefore, all references, henceforth, will be to AL-India.

4.2.1.1 Location

The head office is located near the capital city of New Delhi and the plants are located nearby. The

researcher visited the plant closest to the head office.

4.2.1.1.1 The Head Office (HO)

The head office (HO) is located in a prestigious corporate building complex near New Delhi, the

decor is similar to AL-International’s Swedish head office. Office hours are 9.30 a.m. to 5.30 p.m.,

staff and managers generally reach by 9.45-10.00 a.m. They enjoy a “grace period” of 15 to 30

minutes, tvlanagers and staff punch in time cards while workers sign a register. However, the

managing director (MD), an Indian comes to the office at 8,30 a.m. — an hour before any manager

appears — and leaves not before 8.30 p.m.

JVIost managers sit late, particularly those in the Accounts, Finance, IT, Marketing, and Sales; and

come to office on weekends too. The Vice President (HR) also sits late almost every day. The sole

Swedish expatriate—the Business Controller, in charge of Finance and Enterprise Resource Planning

(ERP), who ranks between the VP and the MD—does not sit late.

Half an hour before office hours begin, the MD holds a meeting with the VPs and GMs to make

decisions for the day. There is also a monthly managerial review (also called the Review Committee)

where departmental heads present reports; emerging issues ai'e discussed and major decisions taken.

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A Sweden Case Study 4,2

Tlie sales, marketing, and service departments also have monthly meetings, to sort out issues and

facilitate coordination. The remaining departmental heads meet whenever required. Representatives

from the plants/factories meet in the head office once in tvvfo months.

4.2.1.1.2 The Plant

As mentioned earlier, the researcher visited the plant closest to the head office. It is a small plant

with 11 managers, 27 staff and supervisors, 35 permanent and 20 casual ITI trained workers. In terms

of cleanliness, infrastructure, and aesthetics, the plant looks like any good Indian plant. As a policy,

workers are not hired locally. This prevents the organization from having local union problems.

Workers sign in and sign out in a register. The plant does not have any female worker, but the

head of HR is a woman. The Executive VP (Operations) is the over all in charge, but the GM is the

one who really manages operations.

The plant runs one shift and consists of a press shop, a paint shop, and an assembly line. Critical

components are imported. The head office decides production targets and these are entered in a

register so that supei-visors can check the extent of target realization at all times. Repoiting of

accounts follows the parent company's uniform format.

The atmosphere was found to be calm and quiet; this can be attributed to the small strength of

the plant. Also, it was seen that the supervisors spoke nicely to the workers. According to one worker,

“the relationship with the supervisor is comfortable.” Another worker said, “He is quite joliy,” Most

workers revealed that they mainly share official problems with their seniors. It was also seen that

permanent workers did not try to boss over casual workers (unlike in some of the other MNCs

examined in this study).

Due to the small workforce, there is no canteen. During the half-hour lunch break workers eat

together, staff and executives eat at a common dinning table, managers in the confereiice room and

seniors in their respective cubicles or chambers. The plant is work oriented where achieving targets,

high quality of products and safety of the work place get priority.

4.2.1.1.3 The Research & Development (R&D) Centre

Tlie Rc&D centre is located in western India and is considered one o f the best (among AL-

International’s global R&D units) and R&D experts from other A1 offices worldwide keep visiting

AL-India’s R&D centre.

141


4.2.1.2 Size

AL-ltidia has about 1,000 managers (including supervisors) and over 3,800 workers in six plants, and

18 brandies all over the country, AL-International has a network of 500 subsidiaries in 150 countries,

with over 100,000 employees.

4.2.1.3 Product Rcinse

AL-India manufactures a range of consumer white goods such as refrigerators and washing machines.

4.2.1.4 Market

AL-India sells its products only in India and around 90 per cent of parts used in product manufacture

are obtained indigenously. However, the 10 per cent imported ones are the most critical.

4.2.1.5 Early Impressions

Thee Director-HR was approached for permission to study the organization. He requested the

researcher to give him some time to discuss t)ie matter with his superiors. After three to four weeks,

and couple of reminders, this researcher was given sixty days to complete data collection. Employees

at all levels and from all departments were interviewed in the office complex.

Tlie researcher was attached to a coordinator from the HR section. In order to get a feel of the place

and make non-participative observations, a coordinator from the HR section was asked to make

arrangements Ibr the researcher to sit quietly in one place so that she could observe employees, in

formal as well as informal interactions, without disrupting the routine.

The coordinator failed to allot any such space. As a result she was compelied to hover around

workstations to gather data. The researcher also attempted to build rapport with employees over

coffee and lunch in the office. As time passed, a few employees began approaching the researcher on

their own and volunteered to share perceptions. Unstructured interviews were also held in the

conference/visitor waiting room.

The coordinator from HR was also requested for help in identifying respondents at various

levels and in different departments. He appeared veiy organized in this regard and proposed that he

would give a list of names and a timetable to the researcher to aid her interaction with employees. She

did not, however, receive any such list. Eventually, this coordinator was seen to approach people on a

daily basis. The data collection thus occuited in an unstmctured fashion and then largely due to the

researcher’s efforts and the rapport she built up with employees.

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A Sw eden Case Study 4.2

Most questions at the unstructured interviews were meant to explore the nature o f the

rehitionship between Indians and expatriates, tlie structure of the organization, target orientation,

decision-making, formalization, and interdepartmental coordination, among other areas. Perceptions

about role of HR practices were also noted during interviews. Employees were aked to share

experiences in relation to non-work practices such as morning exercises, cleaning one’s desk,



fieldwork.

4.2.2 Em ployee R eactions

Certain questions were asked to understand perceptions about the organization and to build I'P

rapport.

Q1. Compare your present job with previous jobs.

(Young executives and managers, who had never held a job earlier, were asked to compare it with the

jobs their friends had in other organizations.)

Table~4.2.1: Executives Compare Workins' at AL~India with Previous Jobs

(Note: Wherever there are no frequencies given in brackets, the frequen cy is one)

Positive Negative

We have better infrastructure and even music etc., here. Indian compatiies do not provide good working conditions.

The salaiy & increments are not satisfactory here.

Get better exposure to the latest technology here. (4)

The previous firm managed human resources better.

Previous firm was more bureaucratic; less motivational.

The workload is greater here.

AL is more professional than the previous organization. (2)

Better team spirit in the previous company

The MD knows many people by name; the top management never interacted with the staff in the previous company. (2)

Interaction was better there— personal touch. This is a more professional firm.

We can express our views more freely here as compared to the previous company. (4)

We have many non-performers at AL.

In AL we will grow with the company. Previous company had an edge over AL~systems

143


and work processes were better placed.In AL union does not create problems. There was more role clarity in the previous

company.There was no freedom of work in the previous company.

Their rewards system was very good.

Better facilities in AL, like we can have tea or coftee as often as we want. (2)

The earlier fiiTn was more aggressive in marketing.

AL is doing good business.hi the previous company we used to feel scared of the HR head. Here it is not so.

The previous company organized many more recreational activities than AL.

In AL promotions are performance driven while in the previous firm they were time bound.

I use to feel more comfortable in the previous firm as we were recognized for our efforts.

AL has a better work culture. Previous firm was more focused on global l e a r n i n g _________________

Managers and staff from the original organizations still talk about belonging to the pre

acquisition companies. The researcher observed fiat the work atmosphere was mostly tense and

people prone to snapping at each other. An employee told the researcher that, “people in AL do not

feel associated with the company, they feel more attached to their previous company.” It would be

useful in this light to glance at the turnover rate. Overall it stands at around 8 per cent at lower levels

and 2 per cent at the middle levels, but is very high in Sales and Marketing where it touches 16 to 17

per cent. The HR department is working on a scheme to improve the retention rate but the employee

turnover rate does not reflect a positive image of the HR section’s efforts.

Workers were also asked how AL-fndia compared to their previous jobs, but most o f them have

staited out with the Organization—many, prior to its merger.

Tahle-4.2.2: Workers Commre Workins atAL-India with Previous Job s


Positive NegativeAs compared to my friend in a Korean company, we are much better off.

Communication and information sharing was better in the previous company. (2)

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A Sweden Case Study 4.2

4.2.2.1 Perceptions about the Merger

As discussed earlier, AL-lndia, a subsidiary o f the Swedish company AL-International (pseudonym),

came into being in 1995 with the acquisition of equity in three leading Indian consumer products

companies— AL-Decor (in which the parent company has 58 per cent share), AL-Enson (parent

company has 74 per cent share), and AL-Amtaz (parent company has 100 per cent share).

Al-Decor, tlie flagship, has the latest technology and a change oriented workforce; AL-Amtaz,

on tlie other hand, is reported to be more hierarchical and centralized in decision making, has less free

mixing across hierarchical levels, a strong and interfering union, time l^ound promotions, and so on.

AL-Enson looks neat and clean, but more like a typical small Indian plant than a multinational unit.

AL-India adopted a number of measures to create an integrated group of companies aid a

number of HR interventions are still in the pipeline. One o f the managers said, “in order to break the

ice between the different companies salaries were rationalized, designations made uniform and

everytiiiiig in general brought onto a uniform platform.”

An information technology (IT) action plan was devised to harmonize all India operations with a

Vk'ell-defmed business strategy to improve efficiency and effectiveness in all operations. The IT plan

covers sales; networks plants and regional offices enabling them to use an enterprise resource

planning (ERP) package; networks with customers; integrates and expands e-business and so on.

Employees, who were working with any of these three organizations since 1995 or before, were

asked to share experiences and feelings related to the merger.

Table-4,2,3: Perceptions about the Merset(Note: Wherever there are no frequencies given in brackets, the frequency is one)

Positive NegativeExecutives

The company became more professional (2) Top level feels that they are losing power.Better quality.Better salary structure and benefits. (3)Profits have increased.Growth is faster.More competitive.We have greater freedom to express our opinion, than we did earlier.I now have something significant to do.There’s better technology.More financial strength.

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Workers

We get medical allowances, bitlhday cards. Feel good!More organizedMore cleanliness. (2)More economically sound.Improvement in machine quality.Improvement in working style.Increased production.

As Table-4.2.3 reveals, despite the groupism that prevailed, most saw positive changes

associated with the jnerger. All the respondents expressed their pride and happiness at being part of

AL-India.

Employee perceptions on organizational efforts to break the ice between the three entities are not

so positive. As one of the employees said, “at lower levels they tried to change group loyalties to

loyalty to the organization, but no change has been effective.”

In the early phase of the acquisition, job insecurity was the foremost concern. As an HR manager

revealed, “Nobody was asked to leave the company.” It seems that the merger was smooth. One

employee commented that, “Earlier it was a laia type company. In the earlier M D’s presence

employees used to feel scared. After the merger we feel free from any such fear.” Workers said they

had also been shown a documentary film on AL-International, its products and various locations.

“Everybody was worried about their jobs,” said another employee, “but AL introduced

themselves very nicely and ensured job security.”

According to another employee, “groupism is still prevalent among the employees of the

different merged companies. The employees of one tend to compare the performance and sales of

their former brands with the other two brands.” The first MD, an expatriate, did a good job of

instilling a sense of security in employees who were scared of losing their jobs after the take over.

However, the present MD feels that there are many Great Wall(s) o f China between groups of

managers, ‘There are personal power centres tliat prevent us from having synergy,” he says. The

differing work cultures already in place may also have a role to play. The MD feels that inculcating a

uniform ‘AL culture’ and getting rid of sub cultures is the top priority for AL.

Overall the merger has yet to be accepted.

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4.2.2.2 Dependence on Head Office

With three organizations being brought under one umbrella and one corporate euhure the researcher

was curious about the degree of dependence on the head office.

4.2.2.3 Relationship o f Plant with Head Office (HO)

All plant representatives meet once in a quarter. Interaction with the head office seemed smooth. The

plant HR-head visits HO once a month. As told by the HR-head, “I alv/ays get support from the HO.”

The recruitment of the workers was done independently. The MD visits the plant once in a while.

There is no fixed schedule for his visits. The expatriates did no interfere on the production line.

AGMs and VP-HR visit the plant two to three times in a year.

4.2.2.4 Identifying Strengths and Challenges

Workers and executive.^ were asked next about AL-India’s strengths, and thereafter, executives were

asked about the changes they would like to see at AL-hidia. While, one employee replied, “I am

unable to pin point any strengths”; others were more positive.

Q4. What, in your opinion, are AL-India’s strengths?

Tahle-4.2.4: AL-India Streneths


Executives

Its people are hard working. (3)Established brand/brand image/has three brand names. (4)Quality.MD has a vision, he is a major sti'ength and a good leader. (5)Employees are taken care o f (3)Distribution system.Product.Our stockholders are very strongResources from the parent company.Employees are committed and dedicated. (2)Money is a vital factor in the growth of the AL.Positive attitude of the top level.Professional approach.Open atmosphere. (2)

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A Study o f Management Practices ofM N C s in India

Good manufacturing base.Work cuil'ure: no pressure from the boss to meet deadlines.Systems and planning.Quality. (3)Brand image. (3)Good people. (2)

Q5. What changes would you like to see at AL-India?

Table-4.2.5: Executives on Preferred Chanees at AL-India


Develop good network of system and processes.hnprove on accountability o f personnel.Be more proactive.We should not have multi culture.Reduce employee turnover.Give better salaries.Employees must own responsibility for the jobs they undertake. (2)Need a younger work force.Work should grow.Need few intelligent people at the top. Tlie rest of the staff should be honest and hard working. ___Improve quality.Improve advertisements.Better HR practices and functioning—medical benefits, welfare schemes, more training Sc. development programs. (2) ________Develop better team spirit.Reduce pull & push concepts— lets have better group dynamics.Introduce more recreational activities.Decisions should not be personal relationship driven.More target orientation.

They were finally asked:

Q6. How does your family feel about your association with AL?

As mentioned earlier, all respondents expressed pride and happiness at being part of AL. Their

families felt happy and proud at their association due to the brand image o f the company.

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4.2.3 O rgan iza tional P rac tices

4.2.3.1 Organizational Structure

Tliere is only one expatriate in the company. He holds the designation of Business Controller— a

position in-between the VP and the MD—and he is in charge o f Finance and ERP. The budget is

sanctioned by the parent company.

Despite such vertical integration with AL-hiternational, AL-India has the autonomy to decide its own

strategy and style of management in keeping with societal culture to a large extent. This much leeway

or margin is given by AL-hiternational to units in other countries also. According to the VP-HR, AL-

USA is much more focused, target oriented, fast and impersonal than AL-Stockholm, which is

focused but much less hierarchical, relatively slow and steady but more egalitarian and participative.

AL-India, while conforming to worldwide standards of production processes, remains Indian in spirit.

As told by the VP-HR “the present set up is ‘glocal’ (i.e. global plus local). There are certain

mandatory processes laid down by the parent company but besides that we handle our operation

independently.”


The reception area and the overall ambience of the head office are very impressive. The seating

arrangement is such that managers and staff drawn from different units can interact freely. They sit

together in open offices divided into cubicles with low glass partitions. Two to four persons sit in a

cubicle. The GMs have separate cubicles and VPs have separate offices— they sit in glass chambers.

Furniture specifications conform to the worldwide norms o f AL, e.g., same height o f tables etc. Soft

music plays at the head office. Regarding the open office arrangement employees have neutral or

positive feelings. One employee said, “It makes us feel comfortable to talk up to the GM level, as all

of us sit in an open office.”

4.2.3.1.2 H ierarchy and Decentralization

AL-lndia’s hierarchical structure comprises 13 levels from a permanent worker to the managing

director (MD). The position of the sole Swedish employee is given in Chart-4.2.1 and the overall

hierarchy in India, in Chart-4.2.2.

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// Study o f Management Practices ofM N C s in India

Chart-4,2.1: Swedish-held Positions in AL~Imlia

Chart~4.2.2: Oreanizational Hierarchy Flow

Managing Director

Business Controller

CFO+ Exec VP’

Vice Presidents

General Manager (GM) or Astt VP


Senior Manager

Manager

Asst. Manager

Senior executive

Executive

A

A

/|\

/t''

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A Sweden Case Study 4.'

Officer/Supervisor

Worker

AL has a multi level hierarchy, and protocol is expected to be followed. An incident: HR employees

noticed that the security guards were not behaving politely with visitors. One said, “Shall I send a

mail to the GiVf-administration?” His colleague advised, “No first inform the assistant nianagei-

administration.” However for taking sanctions, people tend to bank on their relationship with

employees senior to them. For instance, to get a new computer, employees bypass protocol and get

the green signal from the MD.

The MD sets targets and department heads allocate them to individuals. The MD invariably uses the

expression “executional excellence” implying that once a person knows his job and the extent o f his

responsibility for accomplishing the job, he must execute it in such a way that he manifests a high

level of excellence. However, nobody, not even senior managers take independent decisions; they

consult or wait for a nod from the MD— either to take a decision or implement one taken by him.

According to the management, managers receive explicit job descriptions that enable them to perform

well. However, it was found that many executives felt a lack of job clarity and lack of accountability.

It was also found that employees blamed each other or often saying “it is not my job.” For instance, a

management trainee requested the VP-HR’s secretaiy to maintain records o f new trainees joining the

organization. Since this trainee was looking after recruitment she snubbed him, retorting, “it’s your

job, you deal with it.” (In her words “tumhara Icaam hai turn nipto ”).

Another instance reflected this tense relationship among employees and the lack o f team spirit within

departments: ‘A’ said with irritation, “why are you doing this”? The colleague ‘B ’ replied, “Why are

you talking to me like this? After all this is not my job. It is your responsibility.” ‘A ’ said, challenging

him, “Tell me all this on email.” They were getting rude and aggressive with each other. These

incidents were not exceptions. Many such instances, varying in cfegree and nature, were witnessed by

the researcher.

An HR executive said, “everything is centralized in AL-India such as training, performance appraisal

etc.”

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4.2.3.1.3 Formalization

Formalization can be understood in terms o f role clarity, clarity o f plicies, preference for

written communication and to what extent rules are followed. What emerged from the observations at

various locations (HO, plant etc) at AL-India was that the lines of authority were clear, power was

centralized, the subordinates simply followed the instructions, and they all tried to meet targets.

However, there was no formal system of sharing/passing inform ation on to juniors at AI^

India. Inform ation filtered down Informally and differentially depending on the quality of

superior-subordinate relationships.

Managers talked to the MD individually, leveraging their own power and influence in the eyes of

others. Even the senior managers were found to engage in this power building exercise. This tendency

was seen to percolate down the line. Juniors tried to meet their superior alone, staying with them

longer than necessary so that their closeness became visible to others. Naturally, those who lacked

this skill felt left out. They expressed apprehension that their ideas and suggestions were likely to be

ignored. According to one of the respondents, ‘T he ‘yes boss’ people are likely to get promotions

faster.”

One of the managers, expressing concern for the efficiency of cross functional teams, commented, “a

lot depends on how the project leader leads the team. His effectiveness would determine whether the

team would be working with synergy or working in pockets,” Contrast this with what one o f the

GM’s was observed saying, with regard to a forthcoming cross-functional meeting, “Tell me whom I

have to support. What does it matter to me, I will sit wherever you tell me to” {i.e., support whichever

camp you want me to). He spoke in Hindi-and his words were, “mujhe bata dena kiske sur par

rnaarna hai. Mujhe liyafarakpadtaa hai. Mujhe jidltar kahoge rnai wahaan baith Jaaunga.”

Because o f the power and authority o f the superior, boss management has become important at

AL-India and personal loyalty gets a premium. Promotions are based on the "kripa ’ (blessing) o f the

boss. Increments depend on the performance appraisal, but the appraisals are not shared, and the

appraisees have no way of knowing how their appraisals have affected the incentives that they have

received. According to a junior manager, “Never say ‘no’ to your boss in this company. If you adopt

the ‘yes boss’ habit, you might get many benefits including a promotion.” According to another

manager, “Your boss is your god here.”

These misgivings are further fuelled by instances o f inconsistent decisions. For example, a

branch manager fired for indulging in unethical business practices, dubious money transactions,

womanizing and drinking during office hours, was reinstalled after three months. Similarly another

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A Sw eden Case Study 4.2

employee demoted for not meeting targets, was promoted six montlis later. Tliese events sent wrong

signals about organizational ideal versus its functioning. Hard working and sincere employees who

lacked ‘boss management’ were observed to be looking for jobs elsewhere, while others just passed

thei r time as if it dd not matter whether they worked or not. It is part of the culture that wlien

anybody quits AL, nobody seems to bother.

Yet, it is the same company that identifies bright young managers and grooms them! For example, the

VP (HR) picked out a bright management trainee after four of the 12 months of his training. The MD

wanted him to join his e-Business project. But the VP (HR) did not want to lose him. So, now this

young man allocates two thirds o f his time to the project and one-third to HRD, His bosses love him

because he asks for rrore work during weekends. And, of course, he gets a larger pay packet than

many of his seniors. This lack of fomialization, in terms of role clarity and laid down areas of

responsibility that go with a designation, was seen in other instances too by the researcher.

The HR people comment “there are GMs and AGMs who do not have enough worlt” Plant

managers grudge being hard pressed by work while “those in the head office (HO) hardly work that

much.” Those at the HO contend that they are under staffed and equally hard pressed by work.

Crises abound. A junior manager commented that “things are finalized at the eleventh hour” as a

result of which many are preoccupied with fire fighting. The researcher observed much irritation and

screaming that could be avoided if interdepartmental coordination were in a healthier state. An HR

person was observed delaying work sent to him from another department because an HR department

job was pending in that particular department.

The relationship between the departm ents can be perceived as ‘conditional’ in nature. One

of the respondents said, “There is a competitive tendency between the departm ents.”

But things are no rosier within each department either, where, states one respondent, “People try

to push and pull one another.” The researcher could see a clear lack of synergy. People within a

department and between all departments, were observed blaming others or passing on the

responsibility to others.

There is also a global policy to approach “grandpa.” That is, if one is jggrieved with his

immediate boss, he can approach his boss’s boss for redressal. But there are risks and hazards — the

immediate boss could get antagonized. Employees at AL-India tend to live with a lot of steam inside.

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4.2.3.1.4 Bounclaiylessness

Despite cross-functional meetings to ensure no rigid departmental boundaries get in the way of

effective functioning, there is a lack of coordination among departments in AL-India, resulting in

delays, misgivings, mistrust, and even conflict. Finance, for example, is misconstrued to be the police

department that helps less and harasses more. The Sales and the Service departments do not have a

matually supportive relationship because Service feels the sales team walks off with the kudos, while

they do all the work. “It is a thankless job,” said one service department personnel, “A sale, is one

time affair, its servicing is an ongoing process. Sales people do not realize the fact that their sales

deperid on the services provided by us. They accuse us instead of not being supportive and are keen to

grab the kudos bestowed by the management.” Likewise, there is friction between the marketing and

sales people also.

The researcher observed instances that seemed no more than a play o f inflated egos. The head of

the plant does not like HR intei-ventions because he thinks its an encroachment on his domain. In fact,

due to ego problems many I'efuse to attend the training-the-trainer programs.

Summing up, the systems and processes, instead of being conducive to coordinated performance,

are politics-driven and personalized. According to one of the managers, “here interdepartmental

conflicts are at the peak and have an impact on team spirit.” Another employee noted,

“Interdepartmental coordination is personal relationship driven [here], and that is true for most

companies.” As told by one executive, “if there is a sudden need then relationships help.” Another

respondent said, “Reciprocal courtesy helps to get the work accelerated in other departments,”

Overall it emerges th a t in terdepartm ental coordination is m ore relationship-driven than

process driven.

4.2.3.2 Manasement Style

A consultative and slightly authoritarian style is prevalent at AL, i.e., employees are consulted and

given a chance to spealc, but the boss takes the final decisions. An HR person said, ‘The boss gives

the final yes or no.” As far as delegation of authority is concerned, employees are free to execute the

task, but expected to keep their boss informed. One executive said, ‘There is freedom to work, but

freedom to delegate authority is less, therefore things get delayed.” As a senior manager said, “I speak

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to my boss and then I decide.” Most employees try to seek a priori consent on even small issues from

the superiors. As told by one of the managers, “we are not able to build up the environment where

risk is rewarded.” An executive added, (as compared to the previous company he worked in), “in AL

we are more independent. We are given the task and we have to do it with periodic reviews.”

Senior executives claim that they empower their teams. It was observed that a lev3el of formality

exists and most respondents addressed their departmental head as ‘boss’. Some employees were

observed speaking slowly and consciously with their seniors. Most employees also revealed that they

do not share personal problems with their boss. Flowever, one of the managers said, “our boss is very

soft and we share our feelings with her. But the boss does not share everything with us.”

It was noticed that subordinates avoid interacting with their superiors in the presence o f other

employees. This indicates that the communication channels are choked and that employees prefer to

withhold some information from the seniors, which in turn would help them develop a personal

equation with the boss.

Seniors do not have reservations in approaching their juniors at their workstation. It was also

observed that the juniors do not always leave their seat in the presence o f the superiors. As observed,

a VP’s secretary did not seek his peimission before entering his room. Though he was busy over

phone, the secretaiy kept the papers and left his room. Another incident which reflected a comfortable

relationship between juniors and seniors: a junior made a purchase order, wliich was not correct. Her

boss helped her correct it.

ft is not required for the subordinates to stay late in the office along with their bosses.

The VP-HR’s management style is to treat his department as a team, making them feel that all of

them are equally responsible for the growth of the organization. The VP (HR) is very proud of his

own self-driven workaholic habits and does everything that he can possibly do even at the cost of

neglecting his family. He observes, “Gone are the days when the VPs used to give only directions and

sign papers. Now they need to keep on their toes, upgrade all the time and compromise with their

sleep and family... .We can't think of balancing family and work life.”

In order to gain further insight about the prevailing management style executives were asked the

following questions.

Q1. What happens if you make a mistake?

We tiy to find the reason behind it so that we do not repeat it. But we are not scared about it.

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Q2. What happens when you have a problem and approach the boss? How does the boss react?

There were mixed experiences relating to boss reactions but most employees said they were not

scared of facing their bosses in such situations. A senior level manager noted that, the juniors would

push back tiiat moment as far as possible. “They are uncomfortable admitting to problems/obstacles

that come in the way o f completing tasks, just like people in a typical Indian company. They have this

habit of sitting oi the problem,” he said. It was observed by this researcher that AL expects its

employees to work fast and perform a good job. It gives all facilities, but requires one to perform. If

there is any constraint, one must inform the relevant persons at the earliest.

Q3. How long does it take to implement a decision?

Moderately long and it depends on the nature o f the problem. Decisions are based on

discussions.


The former MD, who steered the merger, was a Swedish expatriate. He used to sit with the

employees, give information about the parent and the new company, and assure them of job security.

He was, thus, able to build up the required trust in the employees.

The present MD is an Indian who formerly worked in an American company. He is willing to

transform the management culture at AL. Though emotionally driven he is nonetheless clear headed,

strong, committed, and veiy knowledgeable. While he expects his VPs and GMs to take the initiative,

he gets involved in ail major or minor decisions. He leads by example to ensure high standards. While

he prefers to delegate rather than control, he wants to be kept informed which virtually always lands

him in situations where he shapes the decisions that are apparently made by others.

His strategy is two pronged. First, to put in to place conducive systems and procedures that are

largely in consonance with four core values and six key areas of the company; second, to involve

himself in almost all decision making. To be there always to guide, direct and encourage the

workforce. He strongly believes that if he puts in enough efforts and maintahs transparency in his

style of fiinctioning, he would succeed. He thinks that it is important to have transparent objectives,

systems, and procedures that are communicated to the employees so that they change their old habits

and get rid of any hang-ups.

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According to a senior manager, “the MD tries to drive people, but people do not I'espond to the

extent lie expects them to respond. They are definitely not self-driven. The MD has a style that is

more emotional than professional. He takes interest in family aid personal matters of managers

(children's education, and so on). All this makes him a lovable, competent, but overwhelming boss on

whom even the senior managers like to depend. As a result, people also bank on the MD emotionally

for guidance, direction, and decisions. They behave like kids with him. This emotional bond is fiirther

strengthened by his care and consideration for those who are high performers.”

“The MD is very open, approachable and listens to other’s views patiently,” said one

respondent. Another added, “He appreciates dedication and commitment.”

As stated earlier, the MD feels that inculcating a uniform ‘ AL culture’ and getting rid of sub cultures

is the top priority for AL. According to him, “staying with these sub cultures will be a disaster for

AL.” He believes in throwing out those who fail to integi-ate into the AL culture and promote those

who are potentially good.

To set an example, he fired a branch manager on the spot who failed to improve despite repeated

scolding. Tlie MD is determined to inculcate a uniform AL culture o f “Executional excellence”/

“Achieving excellence.” He probably thinks that one of the flaws in AL is not having a sufficient

number of competent people.

Most of the managers are sdll comfortable with the traditional modes of functioning. This

creates a wide gap between him and his managers, necessitating that he reach out to the lowest layers

and nurture a new breed of competent and dedicated managers who can enable AL to realize its vision

and mission.

The MD feels that they have a “chalta kai culture (any behaviour, even non-performance is

accepted) and that this must change” by hiring from the best institutions, promoting those who

deserve grooming, and weeding out those who are misfits.

He moves around in the corridors and keeps discussing issues with employees at every level. Fie

often has his lunch in the canteen. Fie makes himself available to anyone who seeks his guidance and

direction. He also loves to use a digital camera that he carries around during his perambulations, to

which the VP-FIR says, “He believes in managing by walking,”

The responses below indicate that most employees carry a positive image o f the MD:

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The MD tries to drive people, but people do not respond to the extent that he expects

them to respond.

The MD is very open, approachable and listens to other people’s point o f view patiently.

The MD appreciates dedication and commitment.

The M,D is like a soldier, very clear about his ideas, communication and actions.

The VP-HR also woi'ked with an American MNC earlier. It seems that he has brought the

American culture with him. He feels that “staying late in the office is the requirement of this era. In

these competitive times it is difficult to balance work with family.”

At the AL-Eiison plant visited by the researcher the Executive VP (Operationis) is the over all

in charge, but the GM is the one who really manages operations. However, the GM, Senioi" Manager

(HR), Production Manager, and Manager (Administration), all report to him. He takes daily rounds of

the factoiy, but is careiid not to interact too much with the workers lest his junior managers and

supervisors feel that their authority is being encroached. Only the vei7 old workers take the liberty of

talking to him. Relationships are largely hierarchical and personalized. Managers, staff, supei'visors,

and workers remain clearly segmented. Special attention is given to those who are holding high

positions (e.g., the GM). The supervisor's job is to see that workers are performing, not wasting time,

maintaining discipline and so on. Work gets done through personalized relationships because of the

small size of the workforce.

There were no major disciplinary complaints like late coming, taking leave without any

intimation etc. By and large, the plant functions smoothly.

4.2.3.2.2 Perceptions: The Indian Boss

Most respondents’ feel that the Indian boss needs to be managed and hteraction with Indian

managers is perceived to be a mix of the good and bad. However, at all the locations Indian bosses are

considered more difficult to handle as compared to the expatriates. The opinion of most executives

about their Indian seniors is that:

9 The Indian boss does not share information with those whom he does not trust.

® Seniors mostly do not delegate authority to the juniors. And, even when they delegate,

they follow up daily and keep the subordinates on their toes.

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® There is a propensity to take credit for success and a tendency to shift blame on others

ibr failures.

0 Indian managers value hierarchy. You may say 'no' to an expatriate boss but not to an

Indian boss. He will take it personally and you will have to bear the consequences.

® If you have not behaved as wished by your boss, your expatriate boss would point it out

and forget it. But an Indian boss will remember it and will make you pay later.

s Employees feel that the seniors are nof concerned about the professional and career

development of their subordinates.

It was therefore found worth exploring how Indian executives handled their bosses. The following

comments by the executives reveal the methods they or their colleagues resort to:

® Impress the boss by words and actions. (One executive said, “I have suffered because I am a

straightforward person and could not impress my boss”).

e Boost the boss’s ego.

® Try to become the boss’s secretary—^arrange a lap top, travel tickets and so on.

® Develop a personal relationship at the family level

e Adopt an attitude of “Ji-hazooiT ( ‘yes boss’).

® Do ‘buttering’.

® Give credit to your boss, “we are able to do this only because of you.”

® Never reject the boss’s idea /never say no to the boss.

<3 Discuss what the boss likes such as cricket, the latest car model

e Spend long hours with the boss for no good reason.

® Work on the boss’s deadline.

Overall, the management style was consultative and a bit authoritarian. For instance, one

executive speaking of his Indian boss said, “we have to get up from our seat and greet him as and when we see him,”

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Indian bosses’ repeatedly asked juniors why tiiey had not been able to finish their job in time and

that how much time was still required to complete the same. The general opinion was that “the Indian

boss does not accept the shortcomings of his subordinates.” The common perception is, “the boss is

god”!

Table-4.2.6: Executives Comment o h Interaction Betfveen Indian Bosses and Siihordlnates


Positive _______________________ Negative______Needs to be informed on a day-to-day basis.He does not shout.

Good in getting work done. Demands respect Keeps following up.We have to keep informing our boss about everything.Has a “carry over” tendency—impact o f one incident on future incidents.Relationship with the boss has an impact on appraisals and promotions.Boss management is very important (2)

The relationship/interactions of Indian subordinates and British bosses is discussed as a separate

chapter, in Section IV.

4.2.3.3 Human Resource (HR) Practices

Human resource management is left entirely to the Indian MD brought in from an American

MNC, along with his team. His task was to integrate the systems and norms of the diverse units

within the six global key areas adopted by AL-International (given below in the section on the parent

company). Most HR practices are tailor made as per local requirements. The union, like in other

plants, cooperates with the management. However, nany in other departments feel that the HR

department needs to improve needs to focus more on integrating the mind-sets of employees, their

career planning, and similar other issues, rather than being engaged in personnel flmctions of keeping

employees' leave and appraisal records, preparing salary slips, and deciding increments.

It was observed that the VP-HR tries to maintain open relationships, but prefers to keep control to a

certain extent. As told by HR executives, “even senior HR managers cannot take a decision on their

own.” The VP-HR was repeatedly observed trying to chat informally with junior level employees in

the corridors, who were politely tiying to cut things short and avoid having the conversation.

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As mentioned above, managers and staff from the original organizations still talk about

belonging to the pre-acquisition companies. One of the main tasks of HR initially was to bring about

unilbrmity in the service conditions at the plants. Pre-acquisition, the company had been liberal in

giving holidays. That was curtailed. Workers wages were different. The local conditions were taken

into consideration and wages were settled differently at different plants. Managers' designations were

integrated into 10 levels from the junior most to the MD. The conditions at the workplace were

aligned with the different levels of management. Standard formulae were evolved for conapensation

packages liberally giving increments to manage so that they would not get less than what they were

getting. For instance, information technology was used to develop the ‘human resource payroll

system’ (HRPS). According to the VP (HR), “HRPS is not just software to maintain an active

database of employee history and to manage leave and work routine. It is a much more powerful tool

which will help the organization look for avenues for enhancing employees productivity, both to the

satisfaction of the employees and the management,”

As mentioned earlier, a number of HR interventions are still in the pipeline. However, the existing

systems and procedures are neither fully understood by most employees nor completely followed. It

was observed by this researcher that a manager inquired from the assistant manager (HR) about some

claim. The latter was not too sure about how to put it up and said that the head would put up hundreds

of queries, which would mean a lot of trouble.


The HR department has developed tests to evaluate capabilities, competencies, and attitude such

as sales aptitude test, critical reasoning test, and similar other tests for selecting executives, assistant

managers, and graduate trainees. Graduates from second-rate institutions are hired as executive

trainees for frontline business activities while those from the prestigious institutions such as die

Indian Institutes of Management (IIMs) are selected as management trainees for higher level

functions.

The main HRD unit plans and recruits executives and above for the plants, while workers are

recruited at the plant level with the approval o f the MD, Only ITI trained people are hired. Locals are

not preferred as they might create problems.

AL-India has its own data bank on employees that is checked first before going to the market for

fresh I'ecruitments. Jobs are advertised on the Intranet and anyone from AL can apply directly for any

job in any of the AL companies without any official permission. Confidentiality is assured. Once

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A few employees pointed out that they had not received any training while at AL, Some of the

management trainees revealed tliat the induction training was not very well planned, but “haphazard.”

The running concern of AL is value creation that involves the following 5Cs:

o Competition which requires the organization to be more pro-active to market realities and to

keep an ear to the ground rather than to operate in a reactive mode.

9 Competitiveness that involves pursuing customers and offering them better services,

e Customer focus means learning to take good care of both internal and external customers.

® Cost leadership aiming at eliminating every form of wastage, howsoever trivial it may be.

® Competence involving continuously mapping and upgrading the competence inventory of the

teams so that adl members o f AL become better individuals and better citizens.

{-lowever, ground realities are less than ideal and mishandled egos were obsei-ved to play a large

pail in vitiating the work atmosphere at AL-hidia.

A senior sales manager was assigned the responsibility of giving product training (the module

was devised by the HR department). The MD was not happy about this and asked an HR person to

take over. The manager saw it as derogatory of his abilities and snatching something that was in his

domain. In order to avoid this misgiving, the HR person got him involved in the training program.

But then, the sales manager started treating the HR person as his assistant.

4.2.3.3.2.1 Mentor and Buddy

Mentors are seniors of the rank of GM or above. Buddies are seniors by a few years. While mentors

are expected to guide, buddies are like friends having the responsibility o f facilitating the induction

process. Mixed responses were received regarding the experience with the mentor and buddy. Most

executives revealed that the relationship with the mentor was not of much significance. Like one o f

the managers said, “my mentor does not even know my name.” Another respondent said, “I hardly

meet my mentor.”

However the relationship with the buddy was better. Such as, “my buddy was excellent. Once I faced

some problem in the department and I was very disturbed. My buddy helped me face the reality and

explained how 1 could handle the situation.” A trainee disclosed that he, “did not have any mentor or

buddy,”

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4.23.3 .2 .2 Training Workers

At the time of joining, workers are given induction trailing, on the job training and briefed about the

company rules and pohcies. Workers are given training in maintaining quality, adopting safety

measures, cleanliness, leave rules, and so on. They are trained on all the machines so that their

services can be optimally utilized by job rotation. Workers observe safety and production weeks

during which they are encouraged to come up with slogans and useliil suggestions. Respecting eiders

is one of the inputs in the various training programs.

For workers, there is a morale-booster training module titled ‘We are confident, we shall win ’. During

the training, they sing, inputs are given regarding increasing productivity, maintaining work

discipline, cultivating a team spirit, etc. through exercises and games. The best performing worker (cn

the criteria of performance, cost and quality consciousness, peer relationships, and so on) is picked as

the 'Star of the Month'. He is given a T-shirt and a certificate. His picture is posted on the notice

board. Workers also maintain a safety month, a house keeping month, a quality month, and so on to

sustain their concerns for these performance related issues. Workers get confirmed in about four

years.

Another module taken from Japanese management practices is called the 5-S program. It includes the

following:

® Seiri (Sorting out). Look around the work area and sort out items that are ready to be woi'ked

on, can be reworked and used, and are to be rejected.

® Seition (Systematic arrangement). Label items clearly and place them at prefixed locations

so that they can be easily accessed and used.

® Seise (Spic and span). Clean the machinery and the workplace.

e Seiketsu (Serene atmosphere). Not only workplace and machinery, but also everything else

must remain clean and comfortable.

® Shitsuke (Stick to self discipline). Everyone must remain disciplined, follow rules and

regulations and maintain high standard of performance.

4.2.3.3.3 Target and Performance Orientation

AL is a sales oriented company. It has a unique way of defining the concept o f ‘targets’ in terms of

“value creation.” The target achievement is measured in terms o f how much money they are able to

generate instead o f the mere number of sales made. VP-HR feels 'that in this competitive era

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organizational roles have become very cfemanding. Gone are the days when senior managers jobs

were not hectic. They have a vital role to play in preparing strategies and giving direction. He added

that organizations are wiUing to work vi/ith less number of employees.

There is not so much pressure to achieve the targets as following processes. As long as the employees

have been working as per the processes required, diey could get away with the consequences. As told

by many employees, “AL is a sales driven company, therefore the targets are important to achieve.

Moreover, performance appraisals also give weightage besides target achievement.”

One o f the senior levels managers said, “AL expects its employees to deliver results.” The 5Cs

described above (section 4.2.3.3.2 on Training) reflect the high expectations of the management.

4 .23 .3 .4 Performance A ppraisal System

Managers are appraised on the basis of the extent to which they realize the targets. About 30 to

40 per cent of the pay packets are variable. That is, high performing managers earn much more than

the low performing ones. Thus high performing ones may start getting less than what they were

receiving if their performance deteriorates.

Managers appraise themselves annually on the basis o f Role, Accountability, and Evaluation.

Role assessment that has been developed by the HR department and the package is shared in other AL

companies in many countries as well.

Accountability is elaborated in such a way that the performance can be measured. In the annual

appraisaV evaluation, managers rate themselves against what they committed to accomplish at the

beginning of the year, and what they are going to do in the coming year including the help extended

to other departments. The concerned departmental head then gives his assessment. The forms are sent

to the HR department that keeps them confidential. Thus, appraisals are not shared.

As noted earlier, employees carry mixed perceptions about the seriousness of the appraisal practice.

According to one of the managers, “I have suffered because of the boss’s favouritism.” One of the

managers said, ‘The final decision is the boss’ decision.” According to a manager, “if your boss is

happy then everything is fine.” Some employees revealed that they are “not regular in filling their

appraisal form.” It also indicates the flaws in following the systems and processes.

“Promotions are largely at the discretions o f the boss,” as told by many respondents. An incident

to support this perception: one employee was demoted for not being able to achieve the targets but

was promoted again with in six months. Point to be noted here is that, although he did not achieve his

targets, he managed his boss very well.

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A Study o f Management Practices ofM N Cs in India

However, a junior manager was fired because he iiacl a hair cut during office hours, despite his

explanation that he works from 6.30 am to 9.00 pm seven days a weel< and had no time to get a hair

cut. The MD himself described the case of a branch manager whom he fired instantly because he

tliiled to improve despite reminders. The MD, in fact, refused to write a letter of recommendation for

iiim which is required for getting a job elsewhere.

Yet, in the case of aiother branch manager was fired for being unethical the MD displayed

marlcediy different behaviour. Employees say that everybody was happy with the M D ’s decision. But

soon he was taken back. Most employees interpreted this to be due to the blessings o f the MD.

However, they felt HR should have played a more etiiical role and opposed the MDs decision,

keeping in view its impact on the other employees.

The HR f^ople argue that they are grossly understafTed. With just six managers, they liave to

take care of 3,800 employees. They think that they are doing their best.

4.2 .33 .5 Compensation

The salary structure of AL has a component based on targets and performance. An executive

explained that, “targets are periodically reviewed and the salary is based on performance.”

4.2.3.3.6 Promotions and Incentives

Managers' increments and other benefits are contingent on their superiors' rating that follows the

AL global system and categorizes managers as gold, silver, and blue cardholders. The

recommendations o f departmental heads were seen to play a decisive role not only in deciding the

increments, but also promotions.

Managers and above are given mobile phones. Below that level, a mobile phone is given on a

need basis at the discretion of his VP. Laptops are given to the GMs and above.

AL, as a principle, does not give loans to its employees, but they can buy AL products and pay

the amount in 12 interest free instalments.

4.2.3.3.7 Recognition Practice: Star o f the M onth

Every plant selects a Star of the Month on various parameters such as relationship with peers, cost

and quality consciousness etc. These stars are given T-shirts with the company logo, a certificate and

1 6 6


their photograph is displayed on the notice board. One oi' the employees at tiie HO was given colour

TV by the MD for completing a task in 24 days, though he had two months in hand, HR claims to

follow the abovementioned gold, silver and blue card reward system. However, most employees were

not aware of this practice. Some employees were surprised when told about it.

Workers are rewarded for taking fewer leaves. At plant the department fbund the best in terms of

performance and discipline receives a trophy.

4.2.3.3.8 Open House (held only at the plant)

This is a monthly affair in which all including workers participate and where rewards are given

for giving suggestions; for the best slogans; for taking the least amount of leave, and so on. The GM

and VP plant chair it.

There is also a monthly meeting with everybody at the plant where market, customer feedback

and performance improvement are discussed.


Buses are free for executives and workers. Vehicles are provided to those who return late and do

not have their own car. The GMs and the VPs get a chauffer driven car.

There is a common canteen in the head office. It runs on a contract basis. However, as the food is

not subsidized and employees pay around Rs. 30 for hinch, many bring their own lunch. Peons serve

free tea and coffee. They also serve drinking water in the canteen during lunch, and pick up dirty

dishes.

Security guards are hired on a contract basis.

4.2.3.3.10 L eaveIt is not difficult to take leave at AL, The HR section gets a form filled to maintain a record of leave

taken. Workers have seven days of casual and sick leave each, and 21 days of earned leave. However,

taking leave is discouraged because of the small size o f the labour force. They have to apply for leave

in advance. A worker who takes the fewest days of leave gets a tiffin box worth Rs. 250. Those who

come late have to take a half-day off.

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4 .23 .3 .11 Overall Perception o f HRThere were doubtless many flaws in the image of the HR department, in terms of functions and

eftlciency. Many respondents feel that the grievance liandling system is not formalized, job

description is not that clear, policies of recmitment, training, placement, and promotion are not

strictly followed, and the organization lacks transparency in its functioning, and so on. One of the

respondents said, “I receive my target at the beginning of the year, but I keep getting some other

targets during the year. 1 feel an immense need for guidance on prioritizing tasks.”

It was observed a couple of times that people from departments remained dissatisfied with the

services of the HR personnel, because of delayed work and missing papers. The HR staff was also

observed being quite impolite and non-responsive to the queries and worries o f the employees.

The poor status of the ITR role was validated by some of the HR dejjartment personnel, one o f whom

said, “we are working as a support group and HR tlinctions are business focused. For instance, the

company’s focus is sales, so is the HR focus. And so the ITR section mainly focuses on sales

training.” Another executive from the HR section commented, “AL is not a good place to work for

HR jobs. The HR section here is in its infancy.” Another HR section executive commented that, “HR

is a very dabboo (ineffective or non influential) department.”

Most managers wanted an HR section that played a more supportive role, like improving motivational

strategies. Said one of the respondents, “The HR department is more systems and objectivity driven.

Instead it should have been more caring.” Other employees said, “HR would be better off doing jobs

such as career planning, intervening to resolve conflicts and so on.” HR should have been concerned

about motivating employees, developing sense of belongingness and aiming for some common

identification between employees. One o f the employees said that the department should be renamed

as “ ‘hai’dly any relation’ instead of human resources” . Another employee said, “the role of the HR is

lousy” Among other things, it was found that HR was not able to provide the list o f holidays by

March, as also the training calendar, which indicates a lack o f efficiency.

4.2.3.4 Non-w ork PracticesNon-work practices comprise those activities expected to be performed by all, by virtue o f being

members of the same organization, and may not have any direct relationship to work. Non-work

practices include involvement in social events; how to address each other, and recreational activities,

among others.

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4. 23 .4 . / On a Firat Name Basis

Tlie MD's efforts to induce managers to call each other by the first names has achieved limited

succcss. The top managers addi'ess each other by the first name. Colleagues in the head office address

each other by the first names, .luniors too are addressed by their first names. But only a tew managers

tend to address their seniors by their first name. 'Sir' is used in most cases, particularly where the age

differences are larger, and the seniors two or more levels up. Non-managers address the MD as “MD

Sir.” The organization claims to have an “addressing by the first name culture” but in practice it is not

followed.

The respondents say that they feel unconrfortable addressing seniors by their first name and were

observed addressing their superiors as ‘sir’. As a junior manager revealed, “ [ still feel so odd

addi'essing my seniors by their first name. They are my father’s age.”

The practice is not followed at the plant because it is realized that workers would not respect seniors

if they start addressing them by the first name. One of the senior managers explained the reason

behind the failure of this practice. She felt that, “Indians want to be respected.” Another respondent

said that, “my boss never asked me to address him by his first name.”

In AL, addressing all l)y the first name Is an expected value or practice bu t not a preferred

one.

Tahle-4.2.7t Executives on Addressim Everybody by the F irst Name

(Note: Wherever there are no frequencies given in hracket.s, the frequency is one)

Positive NegativeThe first name practice is good. We do not address our seniors by the first

name: it is a matter of our values.We address those seniors by their first names who have asked us to do so.

If the bosses are addressed by the first name, they would feel insecure about their position.I feel uncomfortable addressing seniors by the first name.Only senior level executives address the MD by his first name.

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4.23 .4 .2 The Dress CodeTliei'e is no formal dress code, but executives at the head cffice are expected to wear a tie.

Permanent worlcers get two sets of uniforms once every year. Worlcers are not punislied for not

wearing uniform, however tiiey are reminded not to continue to do so.

4.2.3.4.3 Tea/Cojfee Self-serviceAs mentioned earlier, peons keep serving tea/coft'ee. However, anybody who wants tea or coffee

at a time when the peon is not serving it, is expected to fetch tea/coffee himself or herself. Only the

VPs get tea and coffee served in their offices as and w/hen they want. Most executives were observed

drinking coffee/tea at their workstation. While some of the employees did serve themselves,

observation revealed a manager's preference for getting tea served at his workstation. Employees

were observed yelling at peons for not serving them at their workstations. At the plant, peons serve

tea, coffee or water. The peons collected the empty cups and did al! the washing up.

4.2.3.4.4 M orning ExerciseThere is no concept of morning ex.ercises or prayer at the plant or any o f the locations of AL-

India.

4.2.3.4.5 Birthday Celebrations

Most employees were not enthusiastic about the practice. A bouquet and a card are given on

birthdays to everybody except workers who are given only a card. Some people distribute sweets. As

observed at the plant, the HR-head was giving cards very casually to the workers. As one of the

respondents said, “It is a routine practice of the HR section. There is a lack of personal touch in their

gesture.” Another respondent said, “We celebrate birthdays because AL-India is an MNC.” Some

employees said, “a birthday celebration is like a ritual,” One of the executives said, “Birthdays are

personal affairs for Indians.”

4 .2 3 .4 .6 Get-togethers and the Annual PicnicPicnics rarely take place, though sometimes a cricket match is organized. Some respondents said,

“we hardly have any picnics or get togethers.” Get togethers are occasionally organized in view of the

success and achievements o f the company. Families are invited for a New Year Party. The plants too

liave such social activities.

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4.2.3.4.7 Other Informai InteractionsThe MD goes beyond work-centric talk and took interest in the families o f managers and

personal issues. It was observed that employees chatted with colleagues over the phone, even though

they would be sitting on the same floor. Informal interactions outside work largely happen between

youngsters and freshers. The interaction, however, is restricted to people at the same level,

A simple observation brought out the ‘language of the workplace’. It was observed that people

mostly used English in meetings at work. However, during formal as well as informal interactions

many people were observed speaking in Hindi.

Non-work practices are not imposed upon tlie executives. It was observed that on festivals (such

as Holi), workers were in a festive mood and were allowed to leave the workplace two hours before

closing time. AL-Worldwide values were not imposed on employees. They are sinking in over a

period of time.

4.2.4 Interaction across international boundaries

AL reflects the confluence of three cultures: Swedish, American, and Indian. The Swedish

impact manifests in the systems and procedures imported from AL Stockholm. Although there is only

one Swedish expatriate physically present in AL, Swedish teams do visit AL frequently. Furthermore,

Indian managers visit Stockholm and interact with their Swedish counterparts. Such interactions

present the perspective of the parent organization and its culture on how work should be viewed,

valued, organized, and performed.

The data was content analysed to arrive at various categories and found significant behavioural

attributes and patterns of interaction with expatriates. The data is discussed on the following

dimensions:

4.2.4.1 Interaction with expatriates4.2.4.1.1 Task Orientationi) Knowledge and skill




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4.2.4.1.2 People Orientationi) Pei'soiial Characteristics

ii) People Orientation / Informal Interactions



4.2.4.1.! Task Orientation(i) Knowledge and Skill

A majority of managers perceive Swedish expatriates as having excellent technical knowledge,

being concerned about quality and cleanliness, open to reasonable discussions on work-related issues.

One of the managers said, “During my interview, the expatriate explained AL-India’s business,

clarified the job description and career profile very meticulously and it is because of him that I joined

this company.” According to an assistant, “The role of the expatriates is to ask us about the support

we need. We send them periodic reports and they appreciate us for our efforts.” Expatriates do not

interfere in day-to-day activities.

(ii) Controlling Orientation

Most Indian executives felt that Swedish expatriates believe in empowering their team and

expect to be kept ‘in the loop’ as it were, and informed about task progress. It came to light during the

interviews that an expatriate took a manager to task rather sternly, shouting at him for not informing

him about delays in completing a task.

The expatriates are observed as strict and punctual; a Swedish manager asked for printouts in 10

minutes but had to wait much longer. The expatriate lost his temper, when the Indian colleague

returned, “Why can't you say 'no' if you cannot do it in time?” They are seen as rigid in their belief

that what has to be done must be done and done on time. They point to their watch if some one is late

by even a minute, respondents said.

Though they do not have much interaction with the plant and do not visit it for auditing, the shop

floor workers felt that the expatriate was nice but very strict. They shared an incident, “Once few

workers were having lunch at 1:35 pm. The expatriate started screaming, not at us but at the

production manager.” Workers also appreciate them for looking after the basic infrastructural

requirements such as illumination at the shop floor. As stated earlier, AL has a norm o f late coming

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and late going by its managers. But Swedisli managers neither get in late nor stay beyond olTice

lioiirs.


One executive said, “The expatriate’s role is to ask us what support we need. We send periodic

reports and they appreciate us tbr our efforts.” The researcher observed the following incident: a

phone was ringing at a table while its occupant was not there. It kept ringing for a while until the

expatriate picked it up. He was furious that no one else in the vicinity had cared to pick up tlie

receiver.

While tfie Swedes are seen as being ruthless in getting work done and meeting deadlines, they

look after the infrastructure needs of the work environment. Shop floor workers appreciated them for

making available basic infrastructural requirements such as illumination at the shop floor.

fiv) Formal Work Practices

As in other cases, the Swedish expatriates are posted here at senior levels and have transplanted some

practices from the parent company such as quality concern, IT revolution, performance appraisal

system, and so on. However, these practices are not imposed on the Indian executives, for instance,

they are not forced to call their seniors by the first name,

4.2.4.1.2 People Orientation

(i) Personal Characteristics

The Swedish are perceived as straightforward, conservative in that they are not heedless risk takers in

business. The Swedish style is to invest a little, watch for the results, only then they invest more.

Americans and Koreans pump in lots of money and then make money. An American expatriate, who

visited AL for a while, was perceived as a jolly fellow. Fie did not care for paper work, was task

focused, particular about meeting deadlines, but not so reserved. He asked about family members of

Indian employees and considered weekends and evenings as fun time. He was prone to shouting and

scolding if a task remained unattended. Once he reprimanded the administration people because a

broken chair had not been replaced for a while. He often scolded the sales staff for not realizing

targets.

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// Study o f Management Practices ofM NCs in India

Many Indian managers feel that, “Swedish expatriates are fairly systematic. They plan and

share all excejjt strategic decisions. They are hard working, punctual, open, and willing to teach by

giving examples.” One executive said, “The expatriate takes a rational approach to the problem and

offers solutions.” They are perceived as being less hierarchical than other nationalities; disciplined

and punctual; straightforward and blunt. According to a senior manager, the present Swedish

expatriate at AL-India is a great taskmaster in temis of meeting deadlines, planning, reporting on

time, maintaining discipline and it is because of him that ERP (enterprise resource planning) system

is well placed.

(ii) People Orientation/Informal Inleractions

The expatriates do not talk about personal matters in office and do not discuss official matters at

parties or at iionie. They question why Indians need to take leave when a child is sick or a family

member hospitalised: a frequent comment— “Why the hell has he to sit back for his mother's

operation!”

They are seen as helpful but only when Che problem/issue is work related. A newly recruited

executive trainee narrated: “I did not know anything about laptops. When my Indian boss was not

around, I hesitatingly requested him [the expatriate] to show me how to use it. He agreed to help me

[and said we would start] the next day at 10 a.m. He came over exactly at 10 a.m. and spent two and

half an hours teaching me. All hidians around me were surprised. He is so punctual that he Insists that

I must start my presentation on time even if the MD is late by a minute. Senior Indian managers are

afraid o f him. He does not allow anyone to interfere while I am making a presentation. He of course

scolds me when I commit mistakes, but that's for my growth.”

Another Indian executive, also not well versed with the computer, had this incident to narrate.

“He made me sit on his chair and told me to just play on the computer initially and that would help

me pick it up. He then left me alone for some time, then returned and explained some o f the important

functions that we use. I was surprised and pleasantly taken aback. No Indian boss would do

something like this.” When another Indian manager joined the HO the expatriate ensured his comfort

and gave personal insti'uctions to the administration to make the necessary arrangements. The

manager said, “Therefore, I feel good and motivated also.”

When expatriates were compared with Indian bosses it emerged that while an emotional appeal

could be made to an Indian boss in the face of any overwhelming personal situation, the same was

futile in the case of the expatriates. About half the respondents believed that Indian superiors go out

174


of their way to help subordinates in personal and family matters, those who are not so close to the

boss, however, are distanced and discriminated against.

However, one of the managers stated, “Indian bosses are more friendly than their Swedish

counterparts. For itistance; one of the managers was transferred to Delhi with his family. The Indian

Ml) showed concern over small matters related to the family such as the children’s schooling and also

invited him home.”

(in) Indian View on How Expatriates Perceive Them

“Some of the Swedes believe that if they pay enough, Indians will do anything or go to any extent to

comply with their commands; and if they refuse, they can be easily replaced,” said one Indian

manager. According to another, “Swedish expatriates do not trust non-Swedish people. They consider

India a slow moving country but respect our hard work. Once trust is built they assign inipoitant

projects to Indian managers.” Overall, most Indian executives carry a positive image about the

Swedish expatriates. According to one executive, “I have learned to respect time, resources, and

technical skills” [by working with them].

Tahle~4.2.8: Executives on Intemctimi between Indian Subordinates and Swedish Boss/es

(Nolc: Wherever there are no ffequencies given in brackets, the frequency is one)

Positive NegativeHave no ego hassles. Are result orientedDo not object to meeting people at any level. Do not understand Indian family

obligations.Do not expect juniors to stand in their presence.I have learned two things from expatriates: be punctual and learn to say no.tliey give you any amount of autonomy as long as you get the task done.Think about teaching people, are polite.Professional approach, punctual.Do not expect people to stay late in office.

Overall, the relationship with the expatriate boss was found to be comfortable and development

oriented. However, it was stated that the Indian boss was able to understand Indian conditions and

constraints better than expatriates.

175



AL-India has obtained financial support, technology transfer; sufficient capital, better conditions

at plants, improved pay and perks, and new systems and procedures from the parent company. The

R&D facilities, located in Western India, are rated as excellent and are highly integrated with the

R&D in tlie Stockholm office. In fact, the entire manufacturing operation is largely determined by ttie

technology provided by the parent company. However, the Purchase and FIR sections were seen to

display a low level of integration with the parent company; while marketing displayed medium-level

integratbn and R&D and manufacturing departments were highly integrated with the parent

company.

Marketing strategy is decided as a part of the global strategy. The parent company has an impact

on the setting sales targets. A senior level manager admitted, “Management control lies with them.”

The coi-nerstones for AL-India to build upon as laid down by the parent company are:

• Brand image (maintaining high brand image visibility).

® People care.

® Purchase (purchasing globally).

® Support system (developing adequate support systems for production).

® Material demands (meeting raw material demand locally as far as possible).

The key areas are supported by the four pillars called Ps consisting o f people (internal and

external customers), pride (in belonging to AL), passion (for performance), and profit (of the

organization). They are the core values that are expected to guide AL worldwide.

In order to enable AL-India to follow the values and shaipen its focus on the key areas, AL

Stockholm gives directives, provides a common managerial framework and approves the budget. The

accounting format is uniform across countries and monthly reports have to be sent to Stockholm.

Every month a team of R&D experts from the parent company visits the R&D in India and shares

information and ideas. The R&D in-charge India also visits R&D Stockholm two to three times a year

in order to share the latest developments.

Occasionally, product-development teams from abroad visit the head office in order to discuss

the possibility of new products. One such team from Stockholm and another from Singapore visit AL

176


annual ly. T'liis is an occasion for AL-India t:o show its worth by making presentations, impressing

upon them the excellent state oF its functioning, and so on. Not only has the Indian subsidiary learnt

ironi the experience of the parent company, the parent company also acknowledges and adopts the

best practices initiated at AL-lndia.

Number of practices have been adopted from the parent company viz IT revolution to integrate

the company (already discussed), quality control etc..

Table-4.2.9: Indian Executives on Interactiom with the Parent Company


PositiveThey share lot of information, but strategic issues are not discussed (3)__________________

NegativeThe Swedes have _ a superiority complex. ________________

They are not very hierarchical—workers and managers eat in the same canteen.

They are veiy formal

They are cooperative.They aijoy weekends and do not stay late in office.

Conservative in spending money.Never invited us home for a meal.

They don’t promote a ‘Sir’ culture. We are given a veiy ordinary accommodation.

They respect our hard work. Market infrastructure was very ordinary.___________________________

They are disciplined and punctual Straightforward and veiy bhint.Meetings are time bound and focused on agenda. ______

Socially not so open.

4.2.4.3 Quality Check

All components are checked. All final products are checked again. In-between, there is random

checking of c]uality. A few are checked for long-term reliability. The MD handles the audit of the

plant.

4.2.5 Organizational Comniltmeiit

“We have a competent workforce but the commitment level is zero. ”

The lack of employee commitment at AL-India has been emphasized by many employees.

As discussed earlier, there is a tendency of blaming others for not performing and fulfdling their

duties. One executive said, “I will leave this job if I get a better break, but I will quit earlier if I keep

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J Study o f Management Practices ofM NCs in India

on getting bad treatment from others.” It was also shai'ed by aie of the respondent that, one of the

management trainees quit the job for a better salary.

‘i ’eopie do not have emotional bonding with the company,” said one executive. Another employee

also made a similar kind of a comment, “emotional bonding is the second level priority. AL is

conditional in taking care of its employees.” Another added, “[due to all this] self drive is missing in

the employees.”

It was sensed from the discussions and observations that most employees do not perceive a

‘sense o f significance and autonomy’ in their job/role. Even middle level managers feel dull and feel

a lack o f authority. As one manager stated, “We are getting good facilities in MNCs, so what if we

have work pressure. MNCs do not worry about petty matters like travel expenses. Here people are

rewarded for performing while most Indian companies follow the practice of time bound promotions.

MNCs have not opened their operations in India for charity. Their major driving force to enter India

is cheap labour and Indians are also joining MNCs for better salaries and standard of living.”

Therefore, there is no ‘psychological contract’ established between the employees and

employers. The Swedes have realized that Indian employees seek better infrastructure and salaries. In

return, the foreign partner demands hard work and target achievement. Targets are achieved more

with the intention of getting better perks and promotion, not for the organization. Employees were

found not identifying with the organization, neither as a member nor in terms of objectives.

Thus, the nature of psychological work processes or commitment of AL-India employees can be explained as Caladative Commitment

The employees tend to view the organization as a means o f fulfilling their materialistic and

monetary ambitions. Beyond that there is no drive to do anything for the organization. They would

quit the job for a better salary. This is evident through the high employee turnover rate and clogged

relationship between the employees and the departments. The atmosphere at AL appears to be tense

and full of mistrust. There is not an iota of doubt in saying that the nature of the psychological work

processes of the employees o f AL has many grey areas and is not harmonious.

4.2.6 O rganizational Effectiveness

Two important dimensions of OE as felt by employees of AL-India are HR orientation and well

placed systems and processes, HR being perceived as the most crucial. As expanded below,

employees clearly feel that both these ingredients are missing in the case o f AL-India.

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Many employees I'eiated organizational effectiveness vvitli the organization's ability to look after

and nurture its human I'esoui'ces. They felt that effective leadership could determine the effectiveness

c)i' the organization. ‘[OE] is understood through certain parameters like empowered workforce,

growth of the employees along with the growth of the company”, said one respondent.

Another defined it as “good work culture,” saying that good work culture was the desirable

condition to retain good manpower. One manager said, “good compensation, due attention to the

luinian resource, and leadersiiip.” According to one of the executives, “OE can be conceptualized as a

transparent organization, wliich values its human resource, has growth potential and employees happy

vvitli the salary.”

Quite a substantial number of employees conceptualised OE in terms of objective parameters,

such as “market share, brand image and profitability.” For instance, “maximum and optimum

utilization of resources (physical and human).” Another parameter o f effectiveness was,

“Responsiveness to different sliarehokiers—society, environment, customers, employees etc.” Some

employees saw a “process-driven-professional company, as a symbol of the effective organization.”

Others talked about well-placed systems and processes. “Practices,” they felt, “should be carried out

properly.”

A similar view proposed by one respondent was, “teamwork, systems and processes under

control, leadership, accountable workforce.” Another respondent explained OE by quoting the

examples of two organizations he perceived to be effective. The common theme in both organizations

was well-placed systems and processes, missing in the case of AL-hidia,

“OE can be conceptualized as an ability o f the organization to run the business in the long run,

generate profits, brand image and keep updating its self as per the market feedback,” said one

manager.

It is culled from the responses that AL-India is not seen as an effective organization. In terms o f

objective criteria such as brand image, profits, not everybody perceived it as doing good job either.

Nevertheless, it evokes a fairly positive image in the minds of managers. According to most of the

respondents, it has the latest technology, sacrifices short-term profitability Ibr long term growth, has a

secure future in India, is adapting to the changing business environment, and is continuously

improving its position in the market. Many respondents feel that the managers do not have enough

freedom to perform their job; pay and perks depend on one's performance, and that recognition and

praise are closely linked to performance. The company has a brand image. Therefore, managers feel

proud belonging to AL, and recommend it to their friends. However, not an insignificant number of

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respondents feel that the grievance handhng system is not formalized, job description is Ho/thatclear,

seniors are not concerned about professional and career dev'elopment of their subordinates, policies o f

rcci'uitment, training, placement, and promotion are not strictly followed, the organization lacks

transparency in its functioning, and so on. According to a senior manager, “AL lias been reactive so

far. It has been fire fighting. It has to be more proactive, predict fiiture changes, and in fact create a

future that enables it to grow and remain at the top in the market.”

Overall, AL--India is seen as an averagely effective organization.

In Sum

It is the top leaders of an organization who cause systems and procedures to function in specific

ways. Witlioiit such a propelling force, the systems and procedures o f an organization remain

inactive. The top man, the MD, and his team (who came with him from the previous company), have

brought in the culture of being fast, assertive, competitive, performance oriented, informal in

interpersonal relationships but ruthless in firing incompetent employees. The fact that the MD moves

freely around the head office, discusses important issues with managers wherever he finds them, takes

lunch in the common canteen, and asks even junior managers to call him and other seniors by their

first name, exposes managers to the American style of management.

There is invariably a time lag between putting a new set of systems and procedures in place to

guide managerial practices and the corresponding transformation o f employee mindsets. AL-India

will probably take some time to get out of this twilight zone. Let us see how this zone looks right

now.

Despite systemic deficiencies and cultural hang-ups, AL has been able to make its managers

work hard. Instead of imbibing the European values o f being stable, slow, and balancing work and

family life, it is closer to the American ethos of hard and fast work life. The high turnover rate does

not bother the management. Work shirkers do. Those who realize their targets and always ask for

more work even on weekends, are appreciated.

So much for the top leadership. The managers and workers at AL are still, however, ridged in the

hidian style of functioning such as respecting hierarchy, being status oriented, striving for personal

power, having preference for personalized relationship and loyalty, and subscribing to the chalta hai

(even non-performance will do) culture. One respondent said, “We are not able to inculcate western

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practictis sucli as punctuality, and accountability, whicli certainly have an impact on the performance

of the organization. Anotiier respondent said, “The internal culture is absolutely Indian”.

Tliese cultural hang-ups persist despite tlie systems and procedures and the MD's forceful

emphasis on executional excellence.

It seems tliat, despite the systems and procedures, many managers have yet to change their old

ways of doing things and relating to each other. They still do not trust the systems. As appraisals are

not shared, managers have to depend heavily on their bosses for rewards or I^ivours. Hence, bosses

exeit a lot of power and influence over their subordinates. So, there is a widespread culture of

boosting the ego to get any work done. There were various instances when colleagues in their own as

well as in other departments were addressing each other as being the most important person or getting

the work done by massaging egos. For instance; one o f the managers was seen requesting the HR

personnel to help him to do TDS cafculations, in his words, "aap maalik ho, aap batao hum kab kar

saktein h a i"— (you are the boss [literally owner/master], you tell me when we should finish this).

The employees were found to be defensive and risk aversive. There is a tendency to blame others.

it was repeatedly observed that colleagues kept whispering. The themes of such conversation are

generally around office matters. It indicates lack of trust and dissatisfaction among the employees. It

was also noticed that the colleagues start with some comments, such as ‘what can they do to us’, and

then go towards the coffee machine or smoking zone to complete their conversation. An observer

observed many such incidents. It also reflects on the requirement of having an open fonim between

different levels. One of the respondents said, “we have a grapevine in the company, which has a

negative effect on the morale of those who work hard.”

It was also found that infornTation is not freely shared, show ing the sense o f insecurity among

the employees and a fear of losing power.

It was revealed on a number of occasions that the relationship between departments and within

each department is not smooth, or process driven. There is a lack of trast in the third party or

intervening party who steps in to resolve disputes. For instance, when the HR department tried to

resolve a conflict in some other department, the common complaint was that “HR is interfering.”

However, on logical grounds it is one of the responsibilities of the HR section to assist in

harmonizing the relationship between employees.

According to one o f the managers, “systems and processes are so much politics-driven that

people do not help those in other departments”. According to a manager, “AL has immense potential,

but has yet to build up and create a good network of systems and processes.” For instance many

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/I Study o f Management Practices ofM N C s in India

complain tiiat the appraisal form consists o f abstract concepts such as intellectual curiosity, analytical

thinking, thinking outside the box, developing others, respect for others, integi'ity, and so on that defy

the way that the MD (roles, accountability, and its evaluation) intends to work. Due to the lack o f role

clarity and accountability and flaws in the systems and processes people have developed a casual

attitude towards work.

The relationship between the employees is not very cordial. There is a sense of mistrust and

competition between the employees. It was observed and revealed by the respondents that people do

not share the best practices rather they criticize and doubt the efforts involved. There is a sense of

insecurity among employees, which is the root cause of the lack of accountability, and lack of open

sliaring of information. The general trend is to hide information, thus taking away the credit. Some of

the employees have blamed HR for not being able to evoke a sense of security and calmness among

the employees.

The work culture at AL-lndIa is diaracterized by hard work, manifestly informal but

personalized relationships, power and position orientation, and centralized decision naklng. Systems and procedures, either Imported from AL-Stockholm or developed indigenously, have yet to take over from traditional Indian ways of relating with cach other. Given this, one wondeis w'tiat level of excellence AL-India can reach if It manages to give a more effective role to its systems and procedures.

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Case Study III: PC“Iiidia

4.3 A Korean MWC in India

4.3.1 O rgan izational P rofile

PC-lndia (pseudonym) is a 100 per cent subsidiary of PC-Korea a big multinational with 51

iTianufacturing bases in Korea and 83 bases across the world, employing 20,000 persons in Korea and

over 110,000 overseas.

4.3.1.1 Location

The factory-cum-head office is a state-of-the-art plant, with a beautifully landscaped exterior

located on the outskirts of Delhi. The reception area is inviting and warm, witli the entire PC product

range displayed. Currently the factory operates only one shift (9 a.m. to 6 p.m.). Several posters

highlighting the company philosophy such as 5S, quality and so on are displayed prominently, A

yellow borderline on the shop floor indicates that people without official work are not allowed further

access. This is to avoid interruption at work.

4.3.12 Size

There are about 225 permanent and 150 casual workers, 75 managers, and 10 Korean expatriates

working in the Indian subsidiary.

4.3.1.3 Product R anse

The product range includes mainly white goods.

4.3.1.4 Marlcet

Given the nature and application of the product range, PC-India has a nationwide market that spans

both urban and rural areas.

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A Korean Case Study 4.3

4. 3.1.5 E a iiv Impressions

Observations and interaction witli employees pointed out tliat the structure of PC is centralized.

Strategic decisions are talcen at the top level. Employees noted that the ‘bosses’ (top executives)

decide targets and decisions and juniors execute them.

As will be discussed later in the section on the Open Office, the very seating plan reflects

hierarchy. As per observation, juniors work quietly in the presence o f seniors. However, when a boss

is not on his seat they chat freely. As an executive put it, “people merely project themseives as being

busy.”

Unstructured interviews were conducted around the main purpose of the study. Most questions

asked were meant to explore the nature of the relationship between Indian bosses and expatriates, the

sti'ucture of the organization, target orientation, decision-making, formalization, and

interdepartmental coordination, which was termed ‘boundaiylessness’ by Sl-India. Employees at all

levels and from all departments were interviewed in tlie office complex. Most interviews were held in

the conference/visitor’s room.

Perceptions about the role of FIR practices were noted during interviews. Employees were asked

to share experiences in relation to non-work practices such as morning exercises, desk cleaning,



fieldwork.

4.3.2 Employee Reactions

Certain questions were asked to understand perceptions about the organization and to build

up a rapport. (For further expansion upon information siven in the tables, please refer to the

Inferences chapter.)

Ql, Compare your present job with previous jobs,

(Young executives and managers, who had never held a job eadier, were asked to compare it with

the jobs their friends had in other organizations.)

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T ab le-4 J.I: M aitasers Commre Workins at PC-India with Previous Jobs


Positive NegativeMore informal and comfortable here because many colleagues are of my age group.

Long working hours, there.

Lot more facilities than an Indian company here. (2) Job was demanding.

Better salary here. (3) Both places have heavy workload.

Can learn here. (4)Last job was like government job.There promotion was time boimd and depended on boss’s biases.PC-India has a flat structure and less bossism compared to previous job.Last job lacked ownership, while here I get support and cooperation from colleagues.Previous company was more hierarcliical.PC is more open and gives freedom to employees, i.e., targets are given and it’s our responsibility to achieve it.

A manager, who had come from another Korean MNC to PC-India, said his former company had

been “authoritarian” so much so tJiat the Koreans and Indians use to slap each other in anger. Another

noted, “You can’t compare an American to a Korean company. My previous organization was

American. It was more flexible and high on emotional involvement.” (He perceived the latter as a

negative trait).

Tahle~4.3.2: Workers Compare Workins at Sl-India with Previous Jo b s


Positive NegativeIn my previous company, 5S were just written on the board, while here we know what 5S is.

Earlier the workload was lighter.

PC is better than many Indian companies with regard to work atmosphere, a common canteen, food. We were told that we can speak to seniors, we are asked for our suggestions.* (2)

Quality ne jaan kha rakhee hai, in his words— This stress on quality is killing us.

Earlier we use to get so many bonuses in a year. Here we get one thrice a year, based on the perfomiance of the company. And in PC we have to work hard.

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We have an open office, it indicates state of openness/^^______________

Here components were not up to the quality standards as tliey were claimed by PC

PC is more open than the American company I was in, in terms of sharing a healthy relationship with women.*

PC is better than many Indian companies but is not an ideal company.

In PC I am able to learn more. The salary here is not satisfactory.In PC we get opportunities for entertainmentlike hinovation Week

As compared to my previous company, PC has long working hours, work pressure, and the technology there was better.

•‘'These respondents were interviewed in the canteen and their bosses were sitting close to them, therefore, they were not comfortable during die interview.

4.3.2.1 Dependence on the Head Office

Unlike the other case studies, there was just one head office-cum-factory in this case.

As the plant is located on the ground flooi' and the administrative offices on the second, it appears as a

highly compact unit. In a lighter vein, the plant is called “downtown” and tlie administrative floor

“heaven”, maybe because the latter is fully air-conditioned. The whole plant, the shop floor as well as

the administrative floor are impeccably clean. One could not find a single piece o f litter anywhere in

the plant. There are specific places where dustbins and brooms are kept. Yellow lines demarcate the

workstations where others are not permitted to go unless they have a specific reason. Slogans and

posters highlighting quality and performance are visible everywhere in the plant.

4.3.2.2 Identifying Strengths and Challenses

Workers and executives were asked about PC-India’s strengths and executives about the changes they

would like to see at PC-lndia.

Tahle-4.3.3: Preferred C hanees a tP C -In d ia

(Note: Wherever there are no frequencies given in hracliets, the frequency is one)

ExecutivesShould be more strict in inculcating habits i.e. 5SReduce long working hours or provide market, saloon etc. in office. (2) Reduce prize. (3)Introduce more products. (3)Saturday should be off.Work innovation.

WorkersConcentrate on quality.Nothing, everything is fine— PC has a mission of being the number one company and it will be.

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l"hcy were asked:

Q6. How does your family feel about your association with PC-India?

Most respondents (workers and managers) said that their family was proud to be associated with

PC because it enhanced social status, but felt bad when they stayed late or were stressed.

Table-4.3.4; Executives on how their Fam ilies feel about their association with PC-Itidia

(Note: Wherever there arc no frequencies given in brackds, the frequency is one)

Positive NegativeSocially fee! proud to tell others due to brand image of the company. (4)

Upset due to long working hours. Ask us “Why don’t you live in the office, as well.” (4)

Enjoy discounts on PC products.Feel good because of rewards-bonus we get. _____Its fine as long as you are getting money whether you work for PC or anywhere else.

The long hours take their toll on family life. According to one female executive: “My mother

often scolds me— Why don’t you live there? You come home only to sleep!” One executive’s wife

asked him to choose between PC and his family, Another executive shared how bad he felt when his

small daughter was unable to recognize him, due to the hours he put away from home.

43.3 Organizational Practices

4.3.3.1 O rsanizational Structure

As far as the global structure of PC electronics is concerned, PC India has vertical linkages with

PC Korea. There is no plan, yet, to develop a cadre of global managers from hidia. Therefore Korean

managers are placed in India. Employees are expected to follow clear authority. At the time of

joining, workers are told that if they have a problem, they may discuss it with their immediate boss.

If the problem is not solved, they may go ilirther, up the hierarchy.

During formal and infamal interactions most executives at all levels responded that everybody has an

independent job responsibility. Written communication is preferred over verbal. Obsei'vations also

brought out that rales and regulations are followed most of the time but diere are some exceptions.

For instance, a senior manager was heard telling his colleague that his boss had decided to recruit a

friend’s candidates for a particular post.

187


One of the important dimensions of a structure witii regard to interdepartmeirtai co-ordination is

‘boundarylessness’. Observations indicate that boundarylessness exists moderately in PC-India as

employees feel that “processes are not the only means to get the work done, personal relations do

matter.” One senior manager said, “PC claims to be boundaryless but it is not so.”


PC-India’s office lay out was similar to that of PG-Korea. As mentioned earlier, the very seating

plan reflects hierarchy. There is a big hall where all employees (except the VPs and the MD) sit.

Eimpbyees of each department sit together; each person has a small cubicle with a low divider.

Everybody is visible. A nameplate indicates who sits at the desk, In this open office subordinates sit

under the close watch of seniors. Lower and middle level managers sit in the middle. Senior level

managers keep a watch on them while sitting at each end. As observed, juniors worked quietly in the

presence of seniors. However, when the boss was not in his seat most of them started chatting freely.

An executive felt that in PC “people project themselves as being busy”.

I'here was a Xerox machine kept in a big hall, which eveiybody used themselves. It was observed that

most people put the chair back in the right place after use. There were very few closed alniirahs in the

big hall at PC. Most were open. An hidian executive was heard saying humorously to his colleague,

“I have brought a lock for PC’s main door.” Another time, an executive was seen asking HR

personnel for a lock and the latter replied with humour, “What is a need of a lock when we feel

boundaiyless”, to which the executive responded, “here you have to put locks.”

Given below is a tabular representation of the seating arrangement. As can be seen in table 4.3.5, each

department sits together, on either side of an open corridor as you enter through the main door.

Tahie-4.3.5: The Open Office Layout at PC-India

Main BoorCustomer Relations Engineering

Human Resources Special-Training

Exports Marketing

Sales Accounts

188


Table-4.3.6: Comments by Executives on Open Offi.ce

(Note: Wherever there are no frequencies given in hracliets, the frequency is one)

Positive NegativeIts fine, everyiaody works like this in this company.

Just physically open, but not in terms of work culture. Openness is limited to conversation in the open!

One to one interaction with boss. Feel unconrfortable & try to show we are always busy.

It saves time when you need to interact. (2) The dividers are too low. I wish they would increase the height. A popular joke here is “we can’t take a nap.”

Initially felt odd, but it has gradually started feeling comfortable.

Helps to connect to many people but can’t hold personal conversations.Not so appealing.

The respect given to the open office concept was observed in the actions o f a Koi'ean expatriate who

was seen putting up some partition between him and an Indian (a senior manager) and that too at his

new woricstation. The Indian did not want him to put up the partition and asked him “Don’t you like

to see my face?” The Korean didn’t respond, ignored his interaction initiatives and continued with

what he was doing. In fact, the interaction between Koreans and Indians ran pretty much along such

lines, as will be discussed in a later section.

4.3.3.1.2 Hierarchy and Centralization

PC-India had multi-level structure with 18 eighteen levels from permanent worker to MD. In this

context the junior level executive (who had been attached to the researcher as a coordinator), tried to

portray that task hierarchy was less hierarchical in that employees at any level could interact with

senior employees. He explained his job requirements and said that he is reported directly to VP. The

hierarchy is given in chart-4.3.1 and the overall hierarchy in India, in Chart-4.3.2 and depaitmental

organizational structure is given in chart-4.3.3.

189


Chart~43.1: Korean-held Posts in PC-India

(Num hcr o f Koreans holding each designation is given in brackets)

Managitig Director (1)Vice I’resident (2-Finance & Manufacturing)General Manager (7): their locations were given as follows

e Training (1)® Marketing (])® Corporate Planning (1)® Export (1) e Material (1)a Research and Development (2)

Chart-4.3.2: Orsanizatioiuil Hierarchy Flow

Managing Director

Vice President

Senior General Manager

General Manager

Deputy General Manager


Manager

Deputy Manager

A

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A Study o f Management Practice.'i o f MNCs in India

Asst. Manager

Senior Executive

Eixecutive

Junior Executive

Senior Olftcer

Offic er/Supervisor

Head Technician

Senior Technician

Senior Operator

Operator

Operator Trainee

191


Chart-4.33: Departmental Ormnkatkmai Structure

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A Study o f A4anagement Practices ofM NCs in India

Koreans hold all the senior level positions such as GM, VP and MD, in Indian operations and

retain all the crucial portfolios, which is seen as indicating their lack of trust. Out o f ten Koreans only

two of them were reporting to Indian bosses (VPs) and rest were reporting to Korean VPs. Koreans

arc also considered as feeling “superior to Indians”. They are not required to punch time cards. They

get a dual salary i.e., in India and Korea, However they do not receive any special status in terms of

cubicles. They also sit with Indians in an open hall, but were seen to routinely fail to respond to

simple overtures by Indian colleagues. The Koreans are also perceived as being impatient, short-

tempered and prone to shouting. One of them is popularly known as 'Tiger'. Their body language

appeared to be aggressive. Indian executives respond with black humour by equating this with the

authoritarian patriarchal regime that exists in many traditional Indian homes. They refer to the MD as

‘Baap' (father) and the other Koreans as taus (father’s elder brothers) and chachas (father’s younger

brothers).

The Koreans are also perceived as action oriented and target driven, which is unlike the Indian

style of working. They are also disliked for their insensitivity to Indian familial obligations and are

considered workaholics. Therefore Indians working in PC feel lot of pressure and stress.


Formalization can be understood in terms of clarity of policies, preference for written

communication and to what extent rules are followed.

Everybody, fi-om the operator to the MD, wears the same uniform which has the company logo.

There is a clear job description for employees, and during formal and informal interactions most

executives at all levels said that everybody had an independent job responsibility. Written

communicatbn is preferred over verbal and observations also brought out that mies and regulations

are followed most of the time but not always. For instance, a senior manager was heard telling his

colleague that his boss was talking about recruiting a candidate of one of his friends for a particular

post.

4.3.3.1.4 Boundarylessness

One of the important dimensions in inter departmental coordination is ‘boundarylessness’.

Boundarylessness exists moderately in the organization as employees i«el that “processes are not the

only means to get work done, persona! relations do matter.”

One senior manager said, “PC claims to be boundaryless but it is not so.”

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4.3.3.1 M anagement StyleI'he auti'ioritarian style that prevailed at PC-[ndia was reflected at various levels as abo in tlie answers

received to the question, “What happens when you run into problems and approach your boss'? How

does he or she react?”

The following points emerged from the replies:

® It depends on his mood, at times he shows he trusts us at times he acts as thougli he has

only mistrust for us.

® Many said, we first try to solve it ourselves or discuss it with colleagues instead of

asking the boss.

® People “avoid” problems; turn their back on it if possible.

® We consult the boss only for major issues.

® People give hypothetical reasons to safeguard themselves.

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/I Study (rfManagement Practices ofM N Cs in India

Box: 4.3.1 Public Shaminfi; Korean Style o f Manaeins

A unique aspect o f this case study was the use o f public shaming by the Koreans to rid employees o f ‘bad’ habits mid stop them from making mistakes.

s Some employees had tiie habit of leaving things scattered on their

desks. The pei'son in-charge took photos of such untidy tables and put

them on board. Tliis embarrassed the concerned people into changing

their habits.

a There was another episode that has been circulating in the plant ever

since it happened. A Korean VP found that a workstation was not

swept and tlie broom was lying there. He did not say a word to anyone.

He just picked up the broom, swept the floor, and placed the broom at

its right place. This had a very demoralizing effect on the worker who

had just gone to the toilet in a hurry and was intending to complete the

sweeping on his return. It had a strong impact on the others too.

® Similarly, during Special-Training, whenever any group member made

a serious mistake, all group members had to hold each other’s hand

and do several sit-ups. Further, the live worst performers had to

confess their failures in front of other employees and promise to

improve their perfomiance.

This researcher noticed that bosses interact rudely with executives. During departmental meetings

everybody remained standing, silent and kept nodding ‘yes’ as and when the boss spoke. The same

style percolates down the line. Supei-visors spoke very rudely to workers. Further, the permanent

workers bossed over casual workers. A few observed instances are given in Box-4.3.2.

195

A Korean Case vStucly 4.3

Bax-4.3.2: Some Instances Reflectim aft Authoritarian Mcmasement Style

G.M. to a junior manager; “Do your work properly. If you commit any error I

will come to know, so do your work properly.”

An executive was shouting at his colleague for not completing the task at hand.

Others intervened and said, “your boss is not around so you are shouting [in his

place]”.

A manager asked the office nurse to check his blood pressure. It was found to be

normal. His colleagues from another department joked, “It’s normal because your

boss the VP-Finance (a Korean) is out of station.”

One colleague was overheard threatening another, “I’ll complain about you to the

Small Tiger (GM-Finance, a Korean).” To which the latter replied, “ We are used

to being scolded by him.”

A supervisor threatened a worker, “I will make sure you are run out of this place”

(In his words: -“mai tujhe hhaga dimga yahan say")

In another case, a worker saki, “if we commit any error the head of tlie department

calls us scolds us to tells us it should not be done again.”

4.3.3.2.1 Top LeadershipThe MD, a Korean, was highly respected and liked, but distanced because o f his position and style of

functioning. Having spent most of his career in the West, he did not seem to be a typical Korean and

yet in many ways remained a Korean. He was perceived as being open and a visionary. He travelled

abroad for nearly or more than half of the month.

He was observed take very frequent rounds of the plant unobtrusively, without asking or picking up a

conversation with any one, and then quietly returning to his chamber. He might drop in at anybody’s

table. If he did not remember a name, he would read from the nameplate on the table, according to an

executive. Even when there was a problem, he looked at it and just passed through. For example, one

morning, the music systetri was not working. A couple of people were trying to sort it out when the

MD happened to be passing through on one of his rounds. He looked at them, and walked away

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A Study o f Management Practices qf'MNCs in India

without saying a word. An instant reaction of one of tlie employees was: “See how he stares at iis, as

if we were holding a laimh/ia (a religious gathering).” He occasionally walked tlirough the plant so

fast that the employees thought he was running. This automatically set a fast pace o f work even at the

lower levels. Many think, if in a hurry it is OK to run. The MD did it! The researcher also noticed that

employees started running whenever they were in a hurry.

The researcher was told that the MD strongly believed in granting autonomy to those under him.

Supervision was the responsibility of the VPs and GMs, according to him, so, lie gave them a free

hand without interfering in day-today matters. And yet, he took rounds to make his presence felt by

all. When a disagreement arose he allowed his juniors to handle the matter, only intervening if the

matter could not be adequately resolved.

In order to retain control over the business, two Korean VPs handle the crucial portfolios of

Production and Finance while Indians handle MR, sales and marketing. The Special-Training module

called “Hyper A” (pseudonym) is taken care of by a Korean working as the General Manager.

For example, this researcher was told about a showdown between the V.P (HRD) an Indian, and the

Korean VP (Production), who used to shout at the Indian managers all the time. Once he went so far

as to throw a chair at an Indian manager but fortunately missed. The assembly litie workers stopped

work. The VP (HRD) insisted that he tender a public apology and the MD saw to it that he did. After

a few months o f strained relationship between the two VPs, there was a rapprochement from both

sides, with a clear understanding about who stood where. So things are working out now. In fact,

whenever there was a complaint against a Korean manager, the MD took due notice. Yet, in many

ways, the MD is seen as a “typical” Korean. He did not want to interact with outsiders, would not

grant any media interviews, and according to one manager, was stuck on just one agenda: how to get

maximum work out of employees. Workers had been instructed that if any visitor or officer passed by

their workstation, they should not look up, but keep working.

The MD meets the workers on the first week of eveiy month; he addresses the entire work force,

highlighting the importance of people in making PC-India a successful company. He gives away

awards to linemen for punctuality, efficiency, and hard work. After his address, one employee talks

about the importance of quality, achieving targets and exceeding them, making PC-hidia the

champion in its line, and so on. While solving a problem for/with his subordinates, he does not

entertain any theoretical discussions nor does he relish the VPs offering a number o f alternative

solutions to a problem. He insists on, ‘one concrete solution’. “He tells us,” said one senior manager,

“to implement it and if it goes wrong then try another way.”

197


In certain ways, tlie MD had a set mind with certain fixed ideas. Once, after coming from an

Indian plant that was plagued with problems, he called the VP (HRD) and said, “Do you know what

their main problem was? Their employees were too old—mostly above 40. See to it that we do not

have any worker above 40,” The MD, thus also made clear that he intends to retain a young, energetic

workforce to handle work pressures that PGIndia intends to filter down the line. The MD’s major

concern is [)erceived to be the extraction o f maximum work from the employees. The same

perspective is found to have percolated down the line.

The 70 managers, who joined in 1997 and 1998, had an average age of about 36 years and work

experience ot about 13 years (PC-India Annual Report, 1998). The workers were much younger, in

their 20s and early 30s, as they had joined within the last three or four years— many without previous

work experience,

'Fhe VP (HRD) seemed to have internalized the MD’s work orientation. He emerged as one of the

MD’s trusted lieutenant’s. The MD felt he was a sharp troubleshooter. The VP appreciated those who

worked hard and delivered the goods and admitted to being ruthless in firing those who did not come

up to his expectations. For example, a person of the supervisory cadre was expelled because of his

misbehaviour and was not taken back, despite the MD’s wishes. The MD, however, had told the VP

(HRD) that he could decide it himself The workers perceived the VP as being a hard taskmaster.

Being called to his office, No, 10, suddenly, was a cause for fear in the workers minds. However, as

an Indian he at least spoke in Hindi and this facilitated communication,

4.33 .2 .2 Perceptions: The Indian Boss

TaMe-4.3.7: Executives Comment on Interaction Between Indian Bosses and

Siihordinates


Positive NegativeNice and open as they have set targets (doesn’t seems so positive by logic given by respondents). (3)

Not very open, give hypothetical rationale to save themselves On a scale o f OlO, I would rate it 5-6. (2)

Straightforward—between one level senior boss. (3)

The boss is reserved and we are also reserved with the boss, (2)Juniors are unable to speak openly. (2)No communication at personal level due to work pressure. (2)Maintain distance, (1)

198


People can’t dare to ask anything directly to MD and VP becaiise they havemaintained distance. (1)_______ _________Communiccition and interaction is open but one has to perform, i.e., your interactions are based on your performance. (3)Boss has lot of ego problems.

4.3.3.3 Human Resource (HR) Practices


Only those who spoke English were hired through a 5-phase recruitment process:

(a) Short listing, (b) interviews tor technical competence, (c) psychometric tests, (d) another interview

to check attitudes to work and people, general competence and related attributes, followed by (e) a

medical check-up. The psychometric tests were administered for junior, middle, and senior managers.

For junior and middle level recruitments, the tests aimed to identify those who had dispositions to

work hard and perform well, work in teams, and cope with details. Juniors were also expected to have

capability to supervise work. Tlie seniors were assessed for their vision, performance orientation, risk

taking, leadership qualities, challenging spirit, and conceptual skills. Graduates iTom reputed

institutions were taken in as management trainees while those graduating from other institutions were

hired as executive trainees - tlu-ee levels below the former.

PC was not keen to recruit managers from IIMs and IITs. There was a belief that graduates from such

prestigious institutions carried with them unrealistically high expectations. PC believed in selecting

those whose mind could be moulded more readily. One senior executive, talking o f this, commented,

“PC doesn't need humans, they need robots.” A few managers expressed hurt about the lack of

utilization of their calibre in PC. They said PC does not need intelligent people, but mediocre people

who run the show. A bias against hiring women also seemed to exist, primarily because they were

less willing to stay late in the evening, according to an HR executive.

4.3 .33.2 Training

Compared to on an average o f two days of training in Sony and Samsung and one and halfday of

training in BPL, PC-India gave on an average 6.2 days of training in 1998, nine days in 1999, and

12.7 days in 2000. Training modules were very carefully designed and rigorously implemented with

the main pur)Doses of improving performance, technical as well as team building skills, managing

change, and above all transforming the mind-set o f the employees.

199

A Korean Case Study 4,3

Every employee was sent to Korea foi- a week’s training. Whoever went there was accommodated in

tiie same hotel irrespective of rank, and got the same hosiiitality. Training in Korea aimed at making

tlie employees aware of the Korean work ethic. Trainees were shown films tliat depicted Koreans

sacrificing for the nation, donating jewellery and money during crisis, etc, just like Indians do.

They were shown that Koreans do not turn on air conditioners unless it becomes indispensable. They

live in apartments because they do not have enough land. They work hard, stay late in the factory, and

keep the factory premises meticulously clean. All these aim to inculcate an attitude to work hard in

adverse conditions and to make sacrifices for tlie country and the organization.

Table-4.3.8: Comments on Experience in Korea

Executives

Positive NegativeHigh commitment toward nation. Korean culture — They have a dowry

system and female infanticide.Nice place. Expensive place.

Workers

Positive NegativeNice, neat and clean Language problem — even if we abused

them they wouldn’t understand.The women there are hard working and work as hard as mea

Food had peculiar bad smell.

After work they go on out and have fun. Not concerned about I'amily as they don’t go home after office hours.

Productivity level is double in Korea.

Women employees are less frequently sent to Korea for training. Women in PC-India are young, and

are believed to be emotionally immature to go through the training in Korea, although the

management denied having any gender bias.

The most rigorous, tough and demanding was Special Training that aims to inculcate 5S;

1. Sweeping one's workstation

2. Being systematic in work

3. Cultivating self-disdpMne

4. Sorting spares properly

2 0 0


5. Following the systems of PC

According to a Special Training trainer: “It is rnind blowing. ... It removes all mental blocks that may

prevent a person from workirig efficiently.”

All newly recruited workers as well as managers had to take this training for a week in groups of 22

persons each. There was no exemption. Tlie first two days were particularly demanding. One of the

activities requii'ed the trainees to hold each other’s hands and take a round o f the factory in six

minutes. The next day, they had to do it in five minutes, a day later in four minutes, and so on till it

became Impossible to run any faster. If one or two of the group members fell down or were not able

to run, the rest of the group was expected to carry him/her or them along with them. This was to

inculcate a team spirit for achieving as much as possible and to value every minute of one’s time.

According to one account, “some faint, others develop blood pressure, and still others feel that they

were being treated like animals in a circus or recruits in a militaiy force”. However, once completed,

the employees reported tremendous growth in their self-confidence and collective orientation. The

trainees were also required to shout productivity or excellence related slogans with rhythm. The

purpose was to develop a sense of coordination. One o f the workers observed: “If we cannot shout

slogans in one voice, how can we work in teams and make PC the champion in its line?”

If any o f the group members made a serious mistake, the whole group was punished. The group

members, for example, were rec|uired to hold each other’s hands and do several sit-ups times like

children do in primaiy schools. For Indian aduls, it could be quite derogatory in normal

circumstances, but because of the group setting everybody — v/orkers and managers — went through

this process and emerged as changed persons.

Another programme called “Digital Training” impressed upon trainees how to make their life better

by taking care o f small things and improving themselves bit by bit. One female employee (a worker)

admitted: “I used to miss my bus. This training let me realize how I can plan my time so that I do not

miss the bus.” Another worker’s perception about digital training was that, “most o f the activities are

fun oriented like dance, games.” However, he was not aware o f the purpose o f the training.

Besides formal training, the management employed a variety o f games, quizzes, talks, etc. for

impressing upon the employees’ mind the importance of working hard, improving performance,

working in teams, keeping the premises clean, being courteous to others, thinlcing of the company

before they thought of family, and so on. As VP (HRD) stated, “not a minute of our employees’ time

and mind is left unoccupied or un-ufilized.”

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4.3.3.3.3 Target and Perjbrmance Orientation

Observations and interaction witli employees at all levels brought out that everything revolves

around targets. Tlie MD pressurizes the VPs about performance and target orientation. PC-India

equates perFormanee orientation witli target achievement. Fiverybody has set targets, which are

periodically revised and reviewed. Target achievement or otherwise intlueiices a manager’s

(lerformance bonus.

Respondents were asked, “What is perFormanee orientation?”

All levels From all departments (including senior HR managei's), said performance orientation was

equal to goal achievement. Many oF them said this with negative Feelings. One oFthem conFessed:

“PC is a good place to learn For two to thi'ee years. If you plan to stay longer you have to plan your

retirement early in life!” Most respondents (both workers and managers) said that while their family

felt proud to be associated with PC and it enhanced their social status, they also felt “bad and stressed

wlien we stay late.” According to a female executive: “My mother often scolds me, why don't you

just stay on there? You come home only to sleep.” One executive’s wife asked him to choose between

PC and his family. Another executive felt bad when his small daughter was unable to recognize him.

Targets are decided by the mutual consent o f PC-Korea and PC-India. Based on that, targets are

decided for each department and individual. Most executives, including GM-HR explained

IJerformance orientation w as nothing but target achievement and was called Key Performance Index-

accoi'ding to GM-HR.

All systems and procedures were geared to realize higher and higher levels of targets. Annual targets

were divided into monthly, weekly, and daily targets. Accordingly, the targets for the next day were

set the previous evening by the production division in consultation with the line supervisors for the

different product lines. Depending on the size o f the order, targets were upgraded.

A Visual Management System enabled workers and supervisors to monitor progress in target

realization throughout the day. This kept the pressure on. Almost every second hour, supervisors

discussed the progress in target realization. Standing Meetings took place immediately after the

morning exercise and again after the shift hours, to discuss the state of realization o f targets.

A musical buzzer rang whenever there was any maintenance problem. Maintenance people rushed to

rectify. In most cases, there was no need to report to and ask the maintenance people for help, thus

reducing time loss to the minimum.

A maintenance man was overheard saying: “Why didn’t you tell me earlier? I could have fixed the

problem saving half-an-hour of your time”. There were instances where maintenance people were

2 0 2


found literally running to fix a machine after getting a call or hearing the buzzer. On another occasion

one of the engineers had broken the lock of a colieague’s cupboard rather than wait Ibr the key tlie

next day, in order to avoid delay in work. Of course witli prior consent.

About 60 per cent of the monthly targets were reahzed by the middle of the month; failing which the

.shill hours were extended from 6 p.m. to 7 p.m. The MD in such situations informed the organization

about the extended schedule with a note: “Thank yon and be ready i'or trouble in future”. If targets

were not achieved by the weekend, workers had to report for work on SatLirdays and Sundays. But

then, the entire office staff had to remain present for extending moral support to tliem. They all got a

special lunch, besides overtime payment to the workers.

The pi-essure emanates from the top and cascades through the supervisors who often spoke roughly,

for example, “ I will run you out of this place, if you don’t achieve the target,”

As everybody, including the managers, has targets to be reached even by staying late in the office, it

was a kind of a shared norm that minimizes any negative feelings that some of the employees might

have.

The positive part was a sense of sharing a joint responsibility; the negative probably was a sense of

suffering in the minds of some who were not directly responsible for lagging behind in realizing the

target. Employees, in another incident, felt unhappy when they had to attend office on an important

Hindu festival because the Chairman of PC-Korea had to visit the factory the next day.

Depending on the targets to be realized in a day or a week, casual workers were hired and placed at

different stations. In order to avoid any legal requirements, services of casual workers’ were

discontinued after every 90 days.

Table- 4.3.9: Comments on Pei'fyrmmtce Orientation

ExecutivesPositive Negative

Optimum use of one’s calibre in budget allocation, time management.

Boss decides and we execute.

It means teamwork and one’s role and responsibility in organization.

In this company performance orientation means goal achievement (4).

Performance orientation is beyond mere target achievement, it includes attitude and relationship.

No way can you avoid it. Job structure is such that we get targets are given ownership to complete it.

It is a must to sustain in this company (2) Goal setting meetings are just a formality because you are not emotionally involved.

1 don’t know what performance orientation means in this company. Here its aim is to make people versatile.

I feel performance lies beyond goal achievement.

203


If I stay in PC for more tlian 2-3 years than I have to plan my retirement early.People crib a lot due to work pressureFeel agitated due to work pressure.

Workers

Positive NegativeExperience lot of work pressure50-60 per cent o f monthly targets are achieved in first half of the month when the factory runs till 7 p.m.MD sends us a note-“Thank you and be ready for trouble in future”.

4.3.3.3.3.1 Long Hours o f Work

As slated earlier shift hours were extended to meet the target. Similarly, managers stayed late in

order to finish their work before they went home. Part of this phenomenon may be the influence of

the Koi'eans wiio had the habit of staying late in the office. There were many instances observed:

® Once the VP (HRD) missed a scheduled visit to a family friend’s as he stayed in the

office till midnight because the MD had called for a discussion on formulating a new

marketing strategy.

® A manager in the production department confided; ’’Once there was a breakdown o f a

line. Even the GM stayed w ith us whole night till the line was operative again.”

o One manager was overheard telling another manager at 6.30 p.m; “Now that you cio not

have any particular work and it is getting late, why don’t you go home?” The instant

reply was; “I don’t want to spoil my family’s habit of expecting me home late.”

® Work pressure was such that workers often had to wait for tea or lunch hours to go to

toilet. They didn’t even sit out the entire lunch hour.

No one was ever found loafing around or talking in a leisurely fashion to another about his or her

personal problems. It was all right for a manager to refuse a coffee by saying, “Right now I am very

busy”, Although English and Hindi newspapers were available in the buses, employees were found

taking naps rather than reading them; maybe because they were tired by the evening and did not

always have enough sleep to make up.

The managers who wanted to stay late had to take permiwssion from their VP to go home by a taxi.

They did not like to ask for the permission. Therefore, there was even greater pressure to finish one’s

204

/I Study o f Management Practices ofM N C s in India

work on time. But the pressure was such tliat they did overstay. Earlier, managers used to stay back,

finisli their work, and return home by a taxi. But then the bill had to be paid from the departmental

budget. They had the autonomy to function, but within the budget. In fact, managing work within tlie

budgets was one of the parametei's of good performance.

'flvus, wliile the managers had accepted the reality of long hours of hard work, a few resented the way

tilings stood. The 3.5 per cent turnover of workers and six per cent managers probably was partly due

to tlie long hours of work under high pressui’e. Here arc a few comments made to the researcher:

® “At the last minute on Friday, they tell you to come to otTice on Satisrdays, as if we

don’t have any family or social obligations”.

® “My mothei' often scolds me: ‘why don’t you stay there? You come home only to sleep.”

© “PC needs robots not us.”

® “People are not happy in PC because we were working half an hour extra so as to

compensate lunch time. You must speak to the workers”, a worker suggested to me.

® “We don’t know why we add particular components to a TV or washing machine,” (This

indicates that they didn’t know the significance of their job its and relevance in the total

l^roduct).

Despite the drudgery of the long hours of work, according to many, the most attractive part of PC was

the opportunity to learn by having an independent job. However the atmosphere is very severe—one

of the workers said while being interviewed by this researcher, “there are many spies in PC and

somebody must be watching us now”. He explained that a worker had once jumped off the bus while

it was moving slowly. Next day he was called and warned not to repeat it in future.

4 .3 3 3 3 .2 Strict Punctuality

Company buses collected workers as well managers and reach them to the factory exactly at

8.30 a.m. Everybody up to the VPs, except Koreans, punches cards for time in and out. From 8.30 to

8.45 a.m. is the time to clean workstations and freshen up, Exactly at 8.45 a.m, they exercise for 10

minutes. In the next five minutes, everybody shouts PC slogans. Work starts at 9 a.m. sharp. There

are two tea breaks in the forenoon and afternoon and a one-hour lunch break. Not a minute more is to

be taken in coming back to work. Many managers eat a quick lunch and return to work well before

the lunch hour fe over. The buses depart exactly 15 minutes after the shift is over.

4.3,3.3.4 Performance Appraisal System

205


'f'here is only one .shuttle in-between at 2:30 p.m., which goes to the branclVliasion office in Delhi.

Since the factory lias instailecl its own vvater-filtration plant so the daily afternoon shuttle delivers

drinking water to tlie branch office along with delivery of daily documents and letters.

Whcneve!' women employees have to .stay teyond 7 p.m., a car or a taxi takes them home. There has

been no instance of any sexual harassment. Men-women relationships are cordial.

Parking is common for staff and e.\ecutives but .separate for visitors,

T’lie canteen runs on a contract basis. Food is served free of cost, but at the parent company in Korea

thi.s is not the case.

'fhe canteen is common for both workers and executives, but with different timings — 12.45-1.15

p.m. for workers and 1.15 to 1,45 for executives. The menu is kept simple as per Indian taste.

According to an HR-executive “our target group is made up of workers who would feel unsatisfied if

typical Indian food (dual, roti, sahzi, curd) is not served."

Indian food is preferred over Chinese dishes, for instance. At lunch, a manager remains present to see

that the food was of good quality. Workers may lodge a written complaint about the quality o f food.

Items such as samosas (a popular Indian snack) are preferred over chips or similar otlier light snacks

with afternoon tea. Whenever employees work overtime, they are served special food. They are

served breakfast as soon as they report to work every morning. This includes milk, fmiiysweet and

bread. It is served at one table and employees pick it up and move to their workstations. Many eat it

immediately, others after the morning exercise, and still others during the tea break at about 11 am.

Workers are served tea and biscuits in the canteen. Workers o f two lines are brought to canteen. Tea

break is for ten minutes.

However, the Koreans don't take Indian food, A Korean lady supplies food for the Koreans and they

eat in a separate room, including the M.D. A special Pizza Lunch is organized once a w'eek where

people from one department meet the MD. It is a forum for suggestions and grievances. However

executives of PC experienced it as a ritual. According to a senior manager, “if a manager wants to

raise any issue he wi 11 first take the green signal from the head o f the department.”

There is one smoking room, one clinic with three beds, and no library. The nurse is on a contract.

4.3.3.3.7 Leave

Employees get 11 days of casual leave, 24 of earned leave and 10 for national holidays. In

addition to this, six days are off due to maintenance of the factory. To take leave, employees are

required to fill up a form and get a sanction from the Head of the Department, Formal and informal

interaction with employees revealed that taking leave in PC is difficult. Most workers feel that taking

leave, “is a crime or sin in PC,” “If you are going to fall sick, inform in advance,” said one worker

207


wryly. Managcr.s also feel tlie same. They said, “It’s a big hassle! That’s why vve just tell them the

.sninc day over the [jlione.” A manager, during inlbrmal interaction said, “If I have to go for an

interview for another job, I have to make someone die!”

4 J J . 3.8 Other HR Activities

The.se include standing meetings, a help desk and innovation week. Prizes are given at standing

meetings to the best employee of the line of the month; a Rs.2000 prize for the best machine

maintenance. Employees are asked for suggestions and grievances, but they remain quiet.

The help desk is another platform for communication with workers, It functions for half an hour every

day during lunclitime and is manned by three members — two from HRD and one from finance. The

lielp desk claims to solve problems witiiin 24 hours. It was observed that most workers raise very

elementary issues like a chain for holding the I-card, some financial claim or information about PC-

India’s product purchase policy for employees. It wiis also noticed that the help desk, in 40-50 per

cent of cases, was unable to solve the problem within 24 hours. Innovation Week happens once in a

month and runs for a week during the lunch hour. Workers are made to play antakshri, take part in

quizzes and some other games. However, the purpose of the games is to remind them o f the

organizational values. Many employees felt that the activities lacked enthusiasm. Thus the activities

are more of a ritual than a means to help employees.

Whether Indian employees like it or not they have to follow these practices and norms o f the

organization. The HR section does not make any particular effort to retain employees.

4.3.3.3.9 Overall Perception o f HR

Overall the HR department is considered very harsh. The VP (HR) is informally called ‘Boss’.

“If any worker is told that the VP has called him they feel very nervous,” (in Hindi this worker had

said, “Room number 10 mein hulahat ho to ttski rooh kanpti ha i”). As an executive noted, “HR is not

looking after the human aspect.”

The VP (HR) has maintained distance from managers as well as workers. The managers think

twice before they plan to visit VP’s chaniber. However employees expressed their expectations from

HR department saying that HR department should be more of a counselling cell where they can share

all their problems —work related as well as personal.

208


4.3.3.4 Non-work Practices

Non-work pi'actices were those activities, whicti were expected to be performed as member of tiie

orgaiiizatiois - like iiow do employees address each other or are involved in social events or

recreational activities.

At IH" seniors were addressed as “Sir” and conscious attempts were made by senior management to

“speak in Hindi, to help remove the communication barrier,” an HR Executive said. He further said,

addressing seniors by the first name was not the culture of PC-lndia. People addressed each other as

Sir/Mr. or by tiie first name in case of a colleague.

4.3.3.4.1 Clean Your Desk

All including seniors cleaned their tables by themselves, except the MD who had an office boy for the

pur|xjse. Pei'iiianent workers cleaned their own workstations while casual workers cleaned common

areas such as the floor, corridors, stairs, and plant areas. During shift hours, permanent as well as

casual workers kept their workstations meticulously clean.

Not all managers like the cleaning part of their job. They were seen to often clean their tables and

thi'ow the duster into the dustbin, as if getting rid o f sontething very distasteful. But they had to clean

uj::>. Thei'e was no choice. Earlier when the plant was started, there were people who ate paan/ tobacco

who used to spit. A painter was kept ready to paint the place they spat on. This brought home the

value of cleanliness. The management made cleanliness a sacrosanct norm that could not be violated

by anyone at anytime.

Tahle~4.3.10: Workers on ‘Clean your desk’{ Note: Wherever there are no frequencies given in brackets, the frecjuency is one)

Positive NegativeIt’s not bad — we should learn good things from others, reflect, have self discipline. (2)

We make fun o f the practice, mock it.

I feel bad about it.Felt odd in the beginning, now we are used to doing it.

Tahle-4.3J1: Manasers on ‘Clean your desk’(Note: Wherever there are no frequencies given in brackets, the frequency is one)

Positive NegativeFeel hesitant but have to do it to remain in PC-India. (2)

209


t’s good but at tiineKS I feel pressurizedIt’s okay, we clean our house, even dogs do it.In my last job the sweepers use to do it for us.I feel bad about it.


liverybody is expected to serve ten/coffee themselves, (although the VP's get served tea and coffee in

their oriice) and clean Iheir mugs on their own. However, a General Manager was seen scolding an

of'fiec boy badly, for not serving tea, “You were serving the entire office except me!” The boy replied

with Fear, “Sir, you were not there.” Tire GM retorted, “You should check with me in the morning.”

Tlie boy apologized.

4.3.3.4.3 Clean your tea mugs

Managers clean their used glasses or coffce cups before leaving in the evening. Litter is cleared as

soon as it appears. The episode of a Korean VP sweeping the shop floor (narrated in detail in a later

section) is a strong reminder to all not to leave any dirt or litter unattended.

4.3.3.4.4 Morning Exercises

Instructions are given via a recorded tape. The 15 minute morning exercise is to energize the

employees and let tliem experience being part o f a team. Workers and managers stand at their

workstations; the GMs and VPs, in front of their offices; those Koreans who sit next to the MD’s

office stand in the corridor. While Koreans e.icercise vigorously and seriously, many hidians do not.

They miss steps and their hand movements are often slack.

Some were observed making fun of the exercise later telling their colleagues, for example, “First turn

right. Ihen turn left”. And they all laughed. Employees report that their outside friends make fim of

them: “Do you still attend assembly the way we did in school?”

Soon after the exercises, everybody shouts the following directions from a recorded tape

Direction

Dii'ection

Tliey all shout

Direction

Attention!

Bow!

“I will obey Super A!” (Super A is explained above)

Attention!

2 1 0


Dircctit)ii

They all shout :

Eiow

“Don't forget tlie fundamentals!”

They all shout :

Direction

Direction

They all shout :

“Change i must!

Quality First!”

Attention!

Bow!

“Wc are the champions!’

It was repeatedly observed that few executives entered the office block when exercises were about to

start or already going on. Those executives remained at the reception and hid themselves to escape

from exerciscs.

Tahle-4.3.12: Manasers on Mornins Exercises( Note: Wherever there are no frequencies given in brackets, the frequency is one)

Positive NegativeNot bad. People exercise because it is part of their

dutyFeel i'antastic. Have to do it because MD and seniors are

doing it.

Feel at home—develops discipline. People make fun of us.Its line....reflects self-discipline Feel bad.

Feel odd in the beginning now we are used to it.

Table-4,3.13; Workers on M ornins Exercises(Note: Wherever there are no frequencies given in brackets, the frequency is one)

Positive NegativeGood for us because of the nature of our jobs, (2)

Almost all of us tfeel we are in school due to exercise and various do’s and don’ts.If we don’t do it properly then the boss pinpoints it and instructs us to do it properly.Feel hesitant.Its good but my colleagues feel odd to do it, They say if you want to work here then you have to do it.Difficulty in the begimiing now its okay.

211


Music is; played and switched off a few minutes after cxercises. Music is again played during lunch

;ind switched off soon aftei-.

4.3.3.4.5 Birthday Celebration

I3ii1hday.s are celebrated at 5 p.m. and tlie company pays for the cake. According to many, it is just a

ritufil. At! executive phoned MR and claimed that it was his birthday. They checked their records and

found he was lying. The executive accepted he wa.s joking. He said, “everything was very quiet so I

tliought let me create some chaos.”

4.3.3.4.6 Family Visits

Wliencvcr families are invited, factory employees have to inform about the number of family

members who are going to join. Accordingly buses are arranged to ferry them from home to factory

and back at the scheduled time,

lieturn gifts are given to family members, as told by workers. Workers also state that when tlieir

families visit the factory they are not permitted to leave their workstations.

4.3.3.4.7 Annual Day and Family Get-togethers

On tlie 'Annual Day' employees families are invited for a party. Family get-togethers are organized

by departments in a hotel. The aim is to make employees and their families realize that they are part

of the I’C family or PC is an extension of family, as told by an HR Executive. Korean families rarely

participate in such get-togethers. Once in a while, all the employees are taken to a movie. However in

reaction to this one of the workers said, “showing movies and expressing love are old tactics. The

management should think of something new to get the best out of employees”,

4.3.4 Interaction across International Boundaries

4.3.4.1 Interaction with Expatriates

The most interesting aspect of these case studies has been the interaction between Indians and

exiiatriates. Observations and interview data reveal that interaction between Korean expatriates and

Indians is not open. The data has also been analyses on Task and People orientation, as follows:

4.3.4.1.1 Task Orientationi) Knowledge and skill


2 1 2



iv) I'ormal Work Practices

4.3.4.1.2 People Orientationi) Personal C'lianictcri sties

ii) l\'ople Orientation / Informal Interactions

vi) I,.ocal View on How Expatriates Perceive Them

4.3.4. /. / Task Orientationi) Knowledge and Skill

'T'lic Koreans arc respected for their technical knowledge, liard work, and dedication to the

company,


Ci'ucial portfolios are retained by Koreans, which is seen as indicating their lack of trust,

Koreans are also considered as feeling “superior to Indians”, As mentioned eai'lier, Indian executives

res|)ond with black luimoiir by equating these authoritarian relationships with an authoi'itarian

patriarchal regime that exists across many traditional Indian homes—referring to the MD as ‘Baap’

(father) and the other Koreans as tints (father’s elder brothers) and chachas (fether’s younger

brothers).


The Koreans are considered workaholics and perceived as action oriented and target driven. Indians

resent the extent to which Koreans get compulsively impatient if there is any slackness anywhere in

the plant. If the tea break is for 10 ininutes, they expect einployees to return to their workstation

exactly at the eleventh minute. Many workers complain: “Why is it so urgent to return to workstation

exactly at the eleventh minute so long as we meet the target? Why don’t they ask for either meeting

the target or being exactly punctual? Why both?”

All the work practices are aimed at achieving the targets. They stay late in office and expect Indians

to do the same. Indians in PC-India feel a lot of pressure and stress.


213


Koreans get all !he senior level positions such as GM, VP and MD, in Indian operations. They

;irc not required to punch time cards. They get a dual salary i.e., in India and Korea. However they do

iiol receive any spccial status in terms of cubicles. They also sit with Indians in an open hall.


Reserved to the e.xteiit tiiat they avoid eye contact, Koreans are reported to shout, get impatient and

k)se tlieir tenijier. Fiulher tiiey are perceived as being too finicky about cleanliness. Koreans at PC-

India ai‘e brought food cooked by a Korean hdy. They eat in a different room, not in the canteen

whicii has been segregated strictly for Indian use only. An Indian executive commented that:

“Koi'cans do not miss anything in India e.xcept cleanliness. They eat Korean food, they even abuse in

the Korean language. They only miss the cleanliness.”

ii) People Orientation/Informal Interactions

The Koreans are also perceived to be short-tempered. Their body language appears aggressive.

They arc reported to shout, get impatient and lose their tempers. One of them is known as 'Tiger'. A

few complain that the body language of the Koreans is oITensive. When they speak their whole body

quivers aggressively as if they are shouting. They generally talk to supervisors and above, but

workers feel bad just by seeing lliem speaking the way they do. O f course, there are exceptions. A

Korean on a short visit to the plant used to eat in the common canteen. Similarly, a Korean was seen

talking to an Indian comfortably, putting his hand on the latter’s shoulder, and even laughing.

On the whole it was observed and told that common courtesies were missing in tlieir interactions

with Indians. They do not greet their Indian colleagues or interact with them outside work and the

boundaries of the workplace. Once a lady working under a Korean told her colleague tiiat, “my boss

doesn't say good morning or good afternoon but gets straight to business. They are mental cases!”

This incident happened during early office hours.

There is no question of interaction outside work. There are instances when Indians tried to

interact witli Koreans outside work but the Koreans ignored them. They do not participate in Indian

festivals. Even if they attend the get-togetlier, they stick with fellow Koreans. The Koreans are also

disliked for their insensitivity to the Indian sense of family obligations.

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A Study o f Management [Practices qf'MNCs in India

Hi) Indian View on H ow the Expatriates Perceive Them

“They do not trust Indians. They do not sliare inforniation openly and consider us a lazy lot.” As

a result, hiciians harboiu' mostly negative f'celings about them. Indians make fun o f what they perceive

as “compulsive” Korean practices sucli as innovation, action-orientation, cost consciousness, and

moi’iiing exercises.

I ’he overall relationship between Indians and these foreign counterparts seems to be conditional

in nature. Koreans want to make profits and Indians look for better salary, perks and better quality of

life.

Indians cany negative feelings about Koreans for controlling and imposing Korean practices on

them and Indians working in PC feel a lot of pressure and stress, Indians make fun of tlieir practices

and habits like innovation, action-orientation, cost consciousness, and exercises. A few instances are

illustrated in Box 4.3.3.

B ox-4.3.2" Indian Em ployees Com ments about Korean Expatria tes and K orean Practices

Before starting anything Indians humorously say “Okay, let’s do if’ in a Korean accent and (lass comments on their action orientation.

Once two Indians kept on saying something indirectly to a Korean (who is seen as the best Korean among others) ending the line with “No Problem” (in a Korean accent). When the Korean ignored their comments one of the Indians said, “Mr. Kim as long as we save cost, no problem.”

“First turn right! Now turn left!” And they all laugh over exercises.

“We must clean our shoes before we go to the meeting you know, this is a Korean company.”

A maintenance man was trying to correct a machine that he did not understand fully. He said: “It must be a Korean innovation!”

Whenever Indians get a chance to control Koreans they never miss it. A Korean came to pick up a

clieque from an Indian. The Indian kept himself busy attending phone calls. The Korean said he

would come back later. As he left, the Indians around laughed and the man said; “Now the mountain

comes to Mohammed.”

Interactions between Indians and Koreans suggest that Indians have ambivalent feelings for Koreans,

much of it negative. There was only one respondent who said, “After being in PC, I learnt to be

215


organized by following 5S and tried to transfer the learning experience at home.” The workers for

inslancc, had this to say, “Koreans do not interact with us,” and, “Once one Korean picked up the

liroom and .started cleaning the floor in front of Head o f the department.”

[Because of their senior positions, all Korean managers have company cars. Neither do they travel by

tlie company’s bus, nor do they punch cards. Korean expatriates eat lunch in the MD’s chamber. It is

a Koi-eaii meal cooked by a Korean lady and brought to the MD’s chamber daily. They smoke a bt,

but only Korean cigarettes.

E.xecutives told the researcher that Korea is “a developed and automotized country”. Koreans are

concerned about their self-image in terms of their countiy image. For Koreans the intere.st of country

comes before individual iiiterest.

Koi'ean food habits are different. They prefer seafood, boiled food and consume lot of garlic.

According to an executive “a peculiar smell comes from their body. We use room freshener in the

office comi^lex. However, tliey look younger than their age because o f their food habits.”

It was obsei'ved that Koreans find great difficulty in speaking English. They have long pauses in

lietween the sentences and words. They use a lot of hand movements. (Koreans are also called

“jokers” because they use sign language for communication with the fndians). Their communication

is generally brief. Initially, there were serious culture based problems. Korean managers used to

shout, get impatient, and lose their temper. Now, according to some, they have changed, but others do

not fully agree.

Their interactions ai'e confined to job matters. Whenever any Indian greets a Korean, he replies

without even looking at the person. He may just be looking at a machine or his computer screen.

There were instances when an Indian tried to engage a K.orean in a humorous chat. The Korean just

smiled and walked away. Rarely do Koreans establish eye contact while talking to fndians. Often they

pass through groups of Indians keeping their head down so that they do not have to make eye contact.

This may partly be due to their deficiency in spoken English. But it is also a matter of their disinterest

in social interactions. A manager lamented; “you can not ask them to come in even for a coffee.”

Every Saturday Koreans meet separately and review the work of the entire week. Their direct access

to the MD through lunch meetings, sharing of Korean language, and the Saturday specials give them

the image of ownership in the minds of Indian managers - an image that does not always have a

positive impact.

According to an executive Koreans don’t waste time in planning and thinking. They believe — try it

out if, it does not work out ivy an alternative. Besides that they don’t like management trainees and

have no intention of developing future leaders. In this context another Indian called them stubborn

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A Study o f Manageinent Practices o/M N Cs in India

(getting the job done in time) and an executive said, “Korean culture is use the stick and rule,”

Koreans do riot want good jjeopie in PC-India because tliey want to run the show. Indian executives

led, “they are here for business and profits.”

.According to a senior hidian manager, many Jiidians do not try to improve their skills and knowledge:

“l-ook at this girl who has been iiere for the last tiiree to four years. She has not improved herself, but

wants greater responsibility, in one itistance, she was given an additional work o f sorting out the bio

data of applicants, Slie complained that it was a clerical job. On the other hand, even persons like me

do it I'egularly."

One manager was overheard saying: “Indian tliinking will remain the same. Whatever happens, we

shall not change”. Anotlier view of an Indian manager about Indians: “We were crook and selfish,

and suspicious of other’s intentions. If somebody does any good to you, yon are likely to suspect why

did lie do that for me? There is no positive thinking. Koreans are straightforward and work honestly.”


The pai'ent organization has installed certain systems and procedures to establish a target

achievement culture, as pinted out by the VP-HR. Tliese include MBO, benchmarking, budget

allocation, delegation of power, clear role allocations, and six-sigma. Besides these, “visual

management” seems to be their favourite tool for the smooth functioning of the wotic system.

The VP (HRD), (1998), listed the following: MBO, benchmarking, budget allocations and delegation

of power, clear role allocations, 6-sigma, suggestion scheme, and so on. He reported that 56 per cent

of 279 suggestions were implemented by 1999. The MD expected 300 TDR (Tear Down &

Reengineering) activities that involved, similar to Kaizen, simplifying a complex process and thereby

improving productivity. TDR may aim for big improvement like making a large number of TVs on a

line or small ones like computerizing provident fiind accounts. Similarly, TPI (Total Productivity

Innovation), 31' (Total quality Circles, and Total Productivity Management), 6-Tools (OS&D), (Main

l^rocess Control, Sequential Inspection, Time Check, Review Meeting, and Quality Audit), demanded

to innovate ways of reducing costs, and so on were other numerous measures that were adopted to

maintain high levels of productivity.

4.3.4.3 Qitality Check

If a defect in the assembling process (driving screws, wiring, etc.) goes unnoticed, the worker on the

next station is expected to rectify it. Once a product is fully assembled and packed, the QC (Quality

217


Control) managcf opens one out of 30 boxes randomly. If a defect is noticed, all 30 boxe.s are opened

and the faults rectified. Red and yellow stickerH are |uit on the defective parts, the red indicatirvg that

vetidors liave .supplied the defective parts and yellow indicating that workers have wrongly assembled

tiiern. These visuals gave feedliack to the workers regarding theii- part in the lap.ses. Defects often

cause delay. This is tlie main reason why targets are not always reached or exceeded. If no such

defects arc detected the previous day, targets are sure to be exceeded. Thus, quite early in the morning

workers know when the targets are going to be exceeded, and the HRD plans, in advance, to reward

tlieni with cold drinks or sweets.

The nuuiagement has adopted a number of measures to see that targets are achieved every day, every

week, every month, and so on even if tliey are raised at a short notice.

4,3.5 O rgan izational C om m itm ent

Employee commitment towards the organization is a result of their experiences and perceptions

about organizational practices. In PC-India employees meet targets out of compulsion. Employees

have to meet targets and “stretch their limits to retain membership of the organization”. Keeping in

view the conventional description of the identification with the organization in terms of

accom(3lishing targets or goals of the organization, PC employees should be perceived as committed

employees. But in reality, calling it commitment towards the organization may be a misnomer. Based

on the observations it seems to be “enforced iiwolvement” with the organization. As far as

respondents’ reactions on queries related to loyalty to the organization are concerned they revealed

that given a chance most employees would leave this company. As pointed out by most employees,

their association with PC is based on the fact that they are paid well and also that target pressure gives

them an opportunity to learn more in shoiter span of time.

Tims nature of the commitment has been found to be ‘calculative conimitnient’. Keeping in

view the overall data, commitment level does not appear to be very encouraging and promising.

The given status reflects a conditional re lationship between employee and employer.

The following section will discuss the impact of Organizational Coinmitment on Organizational

Effectiveness (OE) in PC and status of OE in the Organization.

4.3.<) O rganizational Effectiveness

As discussed in the p-evious section, the nature of commitment In PC is mainly limited to

enforced target achievement, which seems to be a prerequisite to tlilfil the external criteria of OE in

218


tt.;,rms of i)roHts, sales turnover, and assets. Company turnover and prollt records abo indicate

gr(')wiiig I'lnancial perfonnance.

Wlien cxcciifives (re.spondenls) were asked to define eftectivenes.s from their ow jj perspective

iiiany of them highhghted financial, outcorne variables like profits, market shares, assets, growth,

brand image, survivability and adaptability. Most respondents (99 per cent) talked about these and

rated I'C liigii on tiiese dimensions ranging from 3.5 to five on a scale of five where one is the least

effective and five is the most effective organization.

(Jn (lie other liand, e.Kecutives pointed out process variables like ernotioiiai involvement, team

orientation, and employee care and developmental efforts as criteria of OE. hi addition they stressed

on significance of MR practices, low employee turnover, satisfied work force, respect or, valuing

employees, monetary/non monetary benefits, sense of ownership and feeHng of growing with the

growth of organization as factors that enliance OE. An executive said tliat OE is the optimal

utihzation of 4M — Man, Machine, Money, and Material. Similarly, one o f the senior level

executives feels that only missing thread in effectiveness of PC is the low satisfaction and

involvement level of employees, which he attributed to hidians and the poor interaction of Indians

and Koreans.

In the light of the above facts, employees’ perception about effectiveness of PC can be attributed

to excessive work pressure. To substantiate the view, performance orientation is seen as nothing more

tl'ian goal achievement and goals/targets are treated in a numerical form. Thus the entire focus of PC

is on target achievement and profit maximization without giving due respect to the well being of its

employees — the most important asset of the organization, according to an executi ve.

According to Katz and Kahn (1966) and Gibson, Ivanceivich and Donnelly (1973), efficiency is

the short-term characteristic of OE. Flowever, human resource is the most soft, sensitive and

important resource to generate and makes best use of other resources, which is likely to result into

growth, synergy and survival of the organization in the long run.

Summing up, PC seems an efficient organization as indicated by its financial status and

employees’ perception on its performance. However, in terms of process variables it doesn't seem to

be an effalive organization.

Therefore, PC appears to be an efficient organization in terms of the focus on end-result of production targets and improving flnaiicial assets (Qiiiiin and Rolirbsmgh 1983). It appears to be taking a sliort-terni approach than a long-term one.

219


In Sum

The essence of the challenge faced by tlie MNCs operating in India is the fulfilment of the

expectations of the Indian employees working in the MNCs. It is feasible when MNCs put in a

conscious effort to understand their needs and keep these needs as a reference while making

organizational practices for MNCs oper'ating in India. It brings into the picture the important role of

tlie Human Resource (HR) department, wliieh can identify the needs and expectations of the

cm|)loyees and make a bridge between Indians and their foreign counteiparts. The most important

issues regarding executives working in MNCs can be discussed under three categories:

(1) Understanding local culture and tailor-making the organizational practices more suited to

Indian employees working in MNCs operating in India.

(2) Understanding the vital role of HR practices and non-work practices.

(3) Managing the interaction between ex|>atriates and Indian executives.

Overall, HR is seen as harsh department. It doesn’t have retention policy. As pointed out by an

HR execLitive, “PC-India is more about establishing itself in the market than retaining the “human”

asset.”

Above all, VP (HR) has maintained a distance with everybody. Most employees expressed a

desire to have an HR department which reflected “motherly concern” and looked after developmental

needs o f the employees rather than impressing the parent organization, HR should build a bridge

between the Indians and Koreans. It should aim at providing a meaning to human relationship at the

workstation.

The author has found that non-work practices seem to influence employees’ commitment to the

organization. Non-work practices become the base for conducting formal processes in the

organization. Activities like cleaning your own desk or morning exercises are so imposed that they

have reduced comfort and freedom at work. Events like picnic and innovation week lack enthusiasm

and spirit. Above all, many employees pointed out that they do not interact beyond work-role

requirements due to excessive work pressure. One employee said, “I have not able to make any

friends in PC”. Especially in this era of many occupational choices organizations have to look outside

220


the box and aim at developing a psycliological I'elationship between em ployees and w ith employees,

[t would influence the feeling of ‘an extended family’ at the workplace.

As discussed earlier, the interaction between Korean and Indian is not open. As a result, hidians

carry negative feelings about Koreans, However, one of the critical aspects of MNCs operating in

India is the aim to build a harmonious relationsliip between expatriates and Indian executives. Both

expatriates and Indian executives should be given orientation about each otlier's cultural values and

the expected code of conduct or expected social behaviour. Thus, expatriates’ adjustment to living

and working in a foreign culture is very important. Adjustment is a perceived degree of comfort a

person has with his or her environment (Black, Mendenhall and Oddou 1991) and a psychologcal

comfoit (Beehr and Bhagat 1985). Literature has pointed out three important dimensions of

adjuslinent (Black 1988; 1990): Work adjustment is clearly job related, cultural adjustment is

primarily non-work related and interaction adjustment overlaps the work and non-work environments.

Language seems to be the major barrier between Koreans and Indians. Therefore, the parent

organization should send those expatriates who can converse in English. Besides that HR department

or organization has to create a platform for interaction outside work. For instance, picnics, family

gatherings, participation in Korean and Indian festivals need to be encouraged. In order to smooth out

the relationship between Korean and Indian Executives, organizational practices should be

implemented equally like card punching, eating lunch at the same canteen, and travel by the same bus

etc. It would help to reduce a feeling of perceiving Koreans superior to their Indian counterparts.

To sum up, the present study helps to understand problems and challenges Indian executives,

especially tlie HR depaitment, experience while working in a Korean MNC operating in India. The

most important theme that emerged in the present case study is to understand local culture and tailor-

make organizational practices suited to Indian employees.

Employees’ subjective beliefs about the practices are likely to influence their commitment level towards the organization. It was found that Indian employees experience “Conditional

Commitment” and “Enforced Involvement” towards the Korean organization that helps the

organization to be an efficient but not an effective organization.

221


Case Study fV: BW-Iiiclia

4.4 An Iiiclo--Japa,iiese MNC in India

A Japanese MNC was selected for two reasons: first, there are many Indo-.lapanese MNCs

successfully operating in India, like Maruti Udyog Limited. Second, researchers have brought out tliat

eastern cultures clifler from each other. It was, therefore, interesting to study whether Japanese

management practice.s would be suited to Indian executives or not. This researcher chose BW -India

(pseudonym).

4.4.1 O rganizatio iia! P rofile

4.4 .1.1 Location

BW-lndia is a 50:50 Indo-Japanese joint venture and its head office is located in Delhi in a rented

building. The office ambience is not very impressive. The plant, located near Delhi, runs three shift.s

six days a week. Restrooms are common for all. ‘No Smoking’ signs are plastered all over the plant

and the head office.

4.4.!. 1.1 The Head Office

The head office was located in two rented buildings in New Delhi. The Indian partner KK

Shah (the chairman) and his son ML Shah (the CEO) along w^ith tlie Japanese Director, the

Japanese Joint Director and the VP (Finance) and their s taff were accom m odated in one

building. The remaining offices were located in the second building. The buildings were

connected through a corridor that only the two Shahs used. The second building was not that

well maintained. The walls needed repairs and new paint. A ir conditioners were old and

noisy and needed to be replaced. The reception desk needed a face-lift.

The first building was much belter maintained. The walls were nicely painted and the furniture

was of better quality. The office of the VP (Finance) in the first building was much better than that of

the VP (HRD) and had more space, wall-to-wall carpets, a portrait photograph o f Late LL Shah (the

late son o f the CEO and who played a big role in the initial years of BW-India), two latest computers,

three phone sets, and a nice view through a glass window. Even the office of the VP (Marketing) in

the second building was much better than that of the VP (HRD).

222

An Indo-Japanese MNC 4.4

1 iacli noor had two big I’oonis and rest of the space has open offices fo r the staff. They do not

have iiamcphitcs on then- tables. One o f the big rooms is fo r the VPs and another is used as a

confereiict’ room. There is also a room for smoking. All employees, except the Japanese director and

tlie VPs, are reqiiii'cd to punch in and out.

4.4 .1.1.2 TheR& D Wing

'flic R&D at BW-India was liighly integrated with R&D at BW-International, and core activities

;u'c carried out at BW-Japan. The Indian counterpart was allowed only to undertake some basic

testing jobs. Purchase and otlier activities were not determined by the parent comj^any. The marketing

and liuman resource practices were least affected by the parent company. Marketing had to suit Indian

consumers. Maintaining a low price but gaining by high volume of production by managing human

rcsoiii'ces was tlie task that had been largely left to the VP (HRD) and his team.

4.4.1.1.3 Plant

BW-India’s state-of-the-art plant was established near Delhi in 1997. The picture of late LL

Sliah is displayed all over the place as are no smoking signs. All security guards are ex-service men.

4.4.1.2 Size

I'he total workforce includes 379 managers, 2289 permanent workers and 430 casual workers.

Though the company initially incurred losses, for the last ten years its financial performance has

improved manifold.

4.4.J.3 Product Ranse

The company manufectures a range of cycles and motor cycles.

4.4 .1.4 M arketThe products have a nation-wide market—both rural and urban.

4.4.1.5 Early ImpressionsThe VP (HRD) of BW-India was approached for permission to collect data. He said it was okay with

him but he had to seek the CEOs permission. It took a couple of weeks to get a final nod from BW-

India. The researcher was attached to a coordinator from HRD who was requested to nake

arrangements for her to sit quietly at a place where she could observe employees executing their

223

.A Study o f Management Practices oJ'MNCs in India

ofticiul roles as well as observe interaction between employees, in order to have feel of the place and

make nori-participative observations.

After coui’ile d' days, tlie coordinator pointed out that many people questioned tlie researcher’s

presence so she could, therefore, start interviews. Interviews were started and, over a period o f time,

employees of various levels started approaching the researcher out o f curiosity. This also helped to

break the ice, The researcher started building I'aj^port witli employees over coffee and lunch.

Initial interaction was limited to the head office only. After around 10 days the coordinator introduced

the researcher to coordinators at the plant and suggested choosing the locations of the data collection

based on tlie convenience of the coordinators at each location. As time passed a few employees at

both locations approached the researcher and vokinteerecl to sliare their perception.

Si,xty days were given to complete data collection activity. Thus, data was collected from all the three

locations i.e. head office, and both the plant.

Employees of all levels and departments were interviewed in the office complex. Most interviews

were held in the visitors’ room. Unstructured interviews were conducted around the main purpose of

the study. Most questions related to the nature of relationship with the Indian boss and with the

expatriates. The questions also examined tlie structure of the organization, target orientation,

decision-making, formalization, and interdepartmental coordination i.e. “boundarylesness”.

Perceptions about the role of human resource (HR) practices were gathered during interviews.

Employees were asked to share their experiences in relation to non-work practices like morning

exercises, clean your desk/desk cleaning, birthday celebration etc. The following section discusses the

data gathered through observations and interviews and during field work.

4.4.2 Employee Reactions

Certain questions were asked to understand perceptions about the organization and to build up a

rapport. (For further expansion upon information given in the tables, please refer to the Inferences

chapter.)

Q)l. Compare your present job with previous jobs.

Table-4.4.1: M anagers Compare BW-India with their Previous Job


Positive NegativeBoth claim to be professional organizations, but my previous employers never considered the opinions of people working down the line.

My previous employers were better; a professional company. Here, they do not empower employees and we face a lot o f interference.

224

An Indo-Japanese MNC 4,4

At BW, bolli man-managcrnent and technology arc better (2)

In BW discussions are delayed, and there is no autonomy.

In BW, 5S is good The rules are not clear in BW.T’hcre 1 iriissed tlie ti'eedorn to work. It was a l.ala type company, without good teclinology

At my previous workplace, employee accountability was higher as compared to BW. It was a more professional company

In cornparisoji to my previous organization, evei'ything at BW is more planned

My previous organization had better HRD than BW

My previous organization was not concerned about caring for its employees

It was flat structure but here we have so many levels

In BW production plans ai'e decided in advanceMy |)rcvioLis organization was not a protlt nuiking organization.

Fuilher related comments by maniigers were as follows:

® (A comi)arative conintent on non-Japanese MNCs): “You can’t compare an American

and a Korean company. American companies are more flexible and high on emotional

involvement.”

® “My last organization was also an MNC, a Korean one and very authoritarian. The work

culture was so poor that the Koreans and hidians use to slap each other in anger.”

Table-4.4.2: Workers Cammire BW-ludia with their Previous Job

(Note: Wherever there are no frequencies given in brackets, the frequency ix one)

Positive NegativeI here is lot ot difference between the two jobs. At BW wc do not feel away from home. Here we have helping colleagues.

A good physical environment and there’s no smoking inside the plant.

I feel satisfied in I3W.BW is better in terms of disripline.

The housekeeping is good at BW.

Q2. I low docs your family feel about your association with BW?

The managers responded that their families felt “socially proud” because they could tell others about

this association with BW and because they enjoyed discounts on BW products.

225

/I Study o f Management Practices ofM N Cs in India

Q 3. Wliat changes would you like to see in BW?

Table 4.4.3: C lum ses peoifle at the head o ffice w ould like to see a t B W

Di versify products.Adapt to chiuiges as society is changing.Organization and people should grow together.Good job content and role profile.Develop pi'oper systems and policies.We need to have mentoi's, but here (people ai’e concerneci more about expending tlieir own lioi-izon and not letting new comers grow.Recruit new and technically competent staffThose w'ho can’t write English—give them a golden liandshake.Ciive us more opportunity to intei'act with external environment because of Job demands and locations, than we have now.Em|')rovc efficiency, productivity and IT use, (3)Change mindset of people.Workers at the Plant on changes they would like to see at E WReduce noise pollution because it affects our hearing ability.Firing in tlie latest technology.

Q4, Mow do you see the future of BW?E.xeciitives said it was veiy bright but only if the company went in for diversification of products.

4.4.2.1 Dependence on the Head Office

Most decisions, directions and, of course, the final word comes from the head office. Many

executives perceive “a lot of interference from the head office”. The senior Shah (the CEO) told the

.senior manager at the plant: “Keep me informed of everything, even if a bird flutters its wings!” The

culture of BW encourages the bypassing of levels: employees approach the two Shahs directly to pass

on information, seeing it as a ciianee to get close to the top management (see section: Grapevine-

(li'iven Structure).

Managers in the plant, Ibr example, believe that vv'hile they are ovei*worked, those at tlie head office

do not have enough work. However, they do not like the HRD (located at the head office) to recruit

workers for them. Finance and marketing managers e.specially, attach low importance to HRD

managers. This has proven to be a handicap in the latter’s’ efforts to intervene in order to improve

inter-departmental coordination.

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4,4.3 O rganizsrtional Practices in B W -lndia

4.43. / O rm nizational Stniclure

BW-Iiiciia lias vertical linkages with the parent company in Japan. There is no plan as yet to

develop a cadi'e o f global managers from India. Japanese managers are therefore placed in India.

There are two Japanese and two Indian directoi's. While the Japatiese run the technical operations,

liurnan I'csource management is left entirely to the Indian Chairman and CEO (the Indian partner and

iiis son).


Instead of an open office seating plan tlie very seating arrangement reflects hierarchy. Only VPs and

general managers sit in private cluimbers. Employees of same department sit in one room. An HR

officer noted that tlie sitting airangement reminded him of students sitting in one neat line under the

teacher’s eagle eye (in this case the senior maiuiger’s eye). There are hardly any cubicles and this is

according to the employees, impacts privacy. Bosses repeatedly ask about those who are not sitting at

their desk.

There are other indicators of status orientation. The mode of transport when on tour is

determined by one’s level, for example AGM oi’ senior managers travel by air. Other indicators

include access to the direct line given to Assistant managers and above on their desk phones. Junior

officers either request the receptionist or make calls from the boss’s desk, in his absence. Even the

crockery used to serve VPs and juniors is different.

4.4.3.1.2 Hierarchy and Centralization

BW-India’s hierarchical structure comprises 16 levels from a permanent worker to the managing

director (MD). The position of the Japanese employee is given in Chart-4.4.1 and the overall

hierarchy in India, in Chart-4.4.2, and departmental organizational stmcture is given in chart-4,4.3.

The Japanese hold senior posts only. The MD and the Director (Technical) are Japanese and

there are five other Japanese on the shop floor whose main responsibility is to oversee production

planning, new product development, modifications in the current models, market surveys for the

current and new products, and the quality of final products.

227


Chart-4.4.1; Jmmiiese-held Positions in BW-Iudki

Joint M D-(l) Technical D irector-(l)

General managers at plant (5 )

Chart-4,4.2: Orfjimizational Hierarchy Flow

anaging Director

Sr Vice President

Vice ['resident

General Manager

Dy Gen Manager


Senior manager

Manager

Deputy Manager

Assistant Manager

Sr Officer / Sr Engineer

A-

228


Officer / Engineer

Asstt Officer / Asstt Entnneei'

Jr Oflicer

Officer/Suijervisor

Qjiei'ator

BW !ias a tiiuiti level hierarchy, and protocol is expected to be followed.

229


Chasi: 4,3.3: D epm 'tm ental O rsanizatioH alStructure

A a x u t i a TaxatovHO

— AcoDLirits & Taxato) - i=tant

Bsrtov] & TieiKLuy - 1-fO

L egal& Secrela^-H O

Admiraslrafon - HO

Saiesi&fvlateling

Sdes-H O

lixiiaii Direclor^ Jci>:riese3 Di«.Ktoni

[)sHto'sSGaetefk-3t-H0

FteajrteMa-egaret

H n 'e i R esarcs - HO

SfSfViEB'HO

Rdd Spare Parts

hlmri Resarco - Ra;it

PrqedEjigg

aiTjSty/iA£H

i - SFO & O utarxJ

vlapaiiaM Tech'icd M/isois

D«;c.tof's Sciaotaiat -Plafil

Operafefis - Pk¥)t Sq-jfibyCoorcifU'ifai-Cofipcmits

CaiaiTUt RjrcfiKKi

Vt-ricfcr Devfibpnxrrt

Spare Supply

(nfomcaai Systems

infraiitiudijfeMgl

Devdopment-F''‘tyit

pLfchtKO

Rjse£ioii&

230


Centralized Decision-niaking

Becaase of the centralized decision-making, departments are vertically dependent on the CEO

and the cliairmaii. For any issue, the trend is to hold meeting after meeting (many senior managers

resent wasting their time in these meetings). However, this is also seen as “a Japanese style of

managing”. Once problems are examined and alternatives identified, the rninirtes go to the chaimian

and CEiO foi' a final decision. Even senior managers are not empowered to take major decisions. This

erodes their initiative, hi fact, wliile discussing issues they have to keep in mind what these two

would like tliem to suggest. For example, once a deputy manager (Sales) asked his counteipart in

I IRE) if he could hire a person, the latter said that he had no objection, but suggested that he talk to

the CEO who had asked HRD not to sanction new recruitment. If someone talks with confidence on

any issue, it is assumed that he has already consulted witli either the CEO or the chairman.

The centralization of power also wastes time. For example, the VP (Sales) interviews applicants

for the post of local sales representatives while there are four levels in-between to take this load off

him had there been a system of delegation of authority.

This centralized mode of decision-making also tends to constrain systems from functioning tlie

ways they are designed to and restricts the role of the HRD affecting its image adversely.

Though HRD has tleveloped a number of systems jmd procedures, it does not have a free

hand to enable departments to function in a coordinated fashion.

Control o f Head Office

Most decisions, directions and the final word come from the head office and many executives

perceive this as “a lot of interference”. As mentioned earlier, the culture at BW-India encourages the

bypas.sing of levels and approaching the chairman or CEO directly to pass on information. Moreover,

this centralized approach has impacted recruitment too. The HRD hardly has a role to play in most

recruitments, which come through recommendations fiom the Shahs, HRD lias a poor image overall.

Finance and Marketing managers, especially, attach very little importance to HRD which handicaps

HRD efforts to improve inter-departmental coordination.


Formalization can be understood in terms of role clarity, clarity of policies, preference for written

communication and to what extent rules are followed. What einerged from the observations at various

231


locations (MO, plant etc) at BW-India was that the lines of authority were clear, power was

centralized, and the subordinates simply followed the instructions.

However, there was no foraial system of sharing/passing Hsforniation on to juniors at BW-

Iiiclia. Iiilbrmation filtered down informally and grapevine driven structui'e was prevaleut.

Managers talked to the M3 individually, levei'aging their own power and influence in the eyes of

others.

Many employees at both locations expressed lack o f clarity o f roles and responsiljiiities. This was

also seen to cause misgivings between, as well as within, departments.

Promotions do not result into role and responsibility enhancement. An HR executive at one of the

plants shared an incident saying that, “one has to do certain things, which are not part of one’s

rcspotisibilities” — he had been asked to search for general knowledge questions.

I ’he HRD manger’s role is restricted to personnel matters— for example, the HRD initiated the

practice of delineating the Key Result Areas (KRAs) for managers in order to enable them to set

annual objectives so that they may be properly evaluated by their immediate superior. However, old

ways persist and managers do not take it seriously. Moreover, they suspect that even if they do

accomplish all KRAs, they may not get the desired rating.

All strategic decisions are taken at the top level. The employees said that the bosses (top executives)

decide targets or top executives take decisions and the subordinates execute them.

4.4.3.1.4 Bonndarylesstiess

One important dimension o f structure is the salience of boundaries in terms of inter-departmental

coordination and communication across levels of hierarchy.

In BW-India, observations indicate that boundarylessness exists moderately/below average as people feel that “processes were aot the only means to get work done, personal relatioBs matter a lot.”

Inadequate coordination between departments tends to foster personal loyalty and hierarchical

relationships, where the boss decides important matters rendering the junior managers increasingly

dependent on him for direction and guidance as well as due or undue favors. There is no clear system

to share policy decisions with one’s juniors. As a result, they remain unaware or only partly aware of

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iJie major decisions made at llie top. They are, tliercfore, not in a position to execute tiiem on their

own. I1iey remain dependent on tiieir superiors For detailed instructions, and if they fail to conic up to

seniors’ exjiectations, they have ample ground to blame others for their non-performance, in such

circumstances, people create boundaries around themselves. They do not share infoi’mation with each

other, .luniors complained that seniors are more concerned about their own interests. They do not

guide junior officers. Whenever juniors seek their guidance in solving a problem, the seniors are

alleged to be non-responsive to tlie extent tliat the juniors prefer not to bother them again.

I'hus, interdepartmental and intradepartmental coordination in BW-India is poorly managed and

tliis affects the execution of the job.

4 .4 3 .2 M anasem ent Style

All strategic decisions are taken at the top level. The employees said that the bosses (top

executives) decide targets or top executives take decisions and the subordinates execute them. The

authoritarian style prevalent in BW-India was reflected at various levels. The reseai'clier asked

executives, “What happens when you have a problem and approach the boss? How does tlie boss

react to it?” Most responded that they tried to solve the problem themselves or discussed with

colleagues instead of asking the boss. Some said it depended on the toss’ mood. People also said they

ti'otted out excuses to safe guard themselves.

.Juniors address their bosses as “Sir” and then in very submissive and low tones, and do not sit in

a chair in dieir senior’s office, without his nod. Nobody enters a VP’s cubicle without permission.

The same juniors were seen being quite rude while talking to their own juniors. Comments such as

“You are spoilt in this company” are often overheard. The researcher noticed bosses interacting

rudely with executives. An FIR executive £t the plant failed to hear her boss call out for her. He

upbraided her at once, “Do you want to work in this department or not? Why can’t you listen when I

call?” The fact was that she had been busy with official work.

If a junior comes late and is reprimanded by the head, he keeps standing like a culprit. And

nowhere does a junior initiate any new action unless he gets his senior’s permission to do so. It was

observed that everybody remained quiet at departmental meetings and kept standing and nodding

‘yes’ to whatever the boss spoke. The same style percolates down the line. Supervisors spoke very

rudely to workers. Some workers revealed that they had no personal interaction with the engineers

who they said were just concerned about productivity. “We share only official problems,” they said.

Hierarchy is followed even in routine activities and seniors appear to have no faith in juniors and

the VP (HRD) has a poor opinion about the employees in general. He thinks that the employees are

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by and lai’ge negative about BW-hidia and do not want to cliange. Casual comments about each otiier

I'cllect a climate of mistrust: “He said he was going to the computer center,” informed one person,

then added, “but f don’t know where he has, in fact, gone”; “why didn’t you fintjh this work

yesterday? 1 know exactly how much work you had!” The culture of mistrust also percolates down.

People are afraid about others listening in on their phone calls over the EPBAX system.

A senior inaHiager summed up the scenario in the following w jrds: “The strength of the

orgjinization is its team work on the lines, superl) m arketing, latest technology, excellent

network of dealers, and strong leadership. The weaknesses are the lack of trans|)arency in

fuHctlonlng, one way top-down comiminlcation, w eak grievance handling mechanism, inter

personal frictions, yes-boss mentality, doiii)tfui integrity of managers, awcl tiseir weak

commitment to the organization.”

Quality circles were formed only at the plant. As a result of quality circle workers have

redesigned a trolley. Each department in the plant has to have circles and written material is given to

tiiern for conducting the same. Many workers and executives see quality circles as a “ flop show” and

most do not follow the rules of the circle.


The success o f BW-India rests largely upon the leadership and direction of the Indian partner

wlio inked the JV, and upon the efforts of his two sons. While the Cliairrnan M L Shah (the fether) is

not highly educated, he has immense knowledge of technical and financial matters. He also

personally knows his dealers, vendors, suppliers, and others. With a sound financial position and a

well-knit network of over 400 dealers, the senior Shah was in a position to diversify into automobiles,

but he was shrewd enough to stick to his core competency o f two wheelers. The joint venture has not

only added status and prestige to the family in the industrial community, but has also opened up a

new vista for the highly visionary ML Shah. He never forgets his roots, his modest beginning, and a

web of his family members and relatives who have been his dealers, suppliers, and vendors. Outside

the country he has traveled a lot picking up new ideas and trying them out in his factory. Within the

country he visits the smallest towns, if needed, to meet his dealers and establish personalized

relationships with them. Moreover, many of the vendors, suppliers, and dealers are relatives and

members of liis extended family. Those dealers, who are not femily members, are still treated as such.

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His personalized relationships have been further cxincnted by excellent credibility in terms of

immediate payment to vendors. If a dealer decides to discontinue, he .sees to it that his dues are

promptly cleared. He believes that wliile dealings may have a short time frame, relationships should

be much more long lasting.

He has thus accumulated vast knowledge on technical and financial matters and is doubly

blessed with tlie asset of personally knowing his dealers, venders, suppliers, and others. All this keeps

liim in full command of BW, particularly in policy matters (of course, in consultation with the

.lapanese partner). The awards that he has received from 1991 to 2001 are an ample proof of his

achievements.

At the age of 78, he still comes to office at 11 am and stays late, if necessary. He often takes

rounds and chats with the managers who may be three levels below. They keep him informed of

whatever happens in BW. In fact he encourages them to do so. He never loses temper, nor does he

ever scream at any one. Because of his patriarchal style, the senior Shah is respected as the father

figure whose wish is the command for others. All this helps him run BW, of course, in consultation

with the Japanese partner. The employees see him as a vibrant leader. Whenever invited, he makes it

a point to attend weddings and other ceremonies.

A general manager recounted: “He and his wife attended my son’s mairiage. He touched my

mother’s feet and said: ‘your son is the real boss. I do what he asks me to do’. All my friends and

relatives were charmed.”

At home he is a traditional patriarch. Whenever they throw a party, the whole family stands at

the gate to receive every guest. Because of this patriarchal style, the chairman is respected as a father

figure whose wish is the command for others. He never loses his temper, nor does he ever scream at

any one. The worst that he might say is that he is upset.

His elder son, LL Shall, now deceased, was the man who really ran the factoiy in its initial

years. He was qiite friendly with workers. Many who joined BW in the initial era remember him

nostalgically, often with tears in their eyes. LL Shah knew many workers and dealers by name. An

operator who is now a line supervisor recalled: “When my mother was sick I went on a long leave, I

was real scared when I came back to join. But he reassured me: \Bhai (brother) take one grain away

from a bag, it does not make a big difference. I am glad that your mother has recovered,’ On another

occasion he gave a loan of Rs. 40,00,00 for the treatment of a worker’s father. During a strike he

called the employees and said: ‘The factoiy is your mother. It nurtures you from 20 to 50 years of

age. Now you have to decide how you will treat her,’ And during the same period, seeing the workers

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// Study o f Management Practices ofM N Cs in India

on strike silting on tiie lawn iincler the scorching sun he got them a tent and a water tanker. He said:

‘The strike is temporary, but the workers arc permanent.’ ”

He invariably used to visit tlie shop floor and talk to tlie employees. A nother operator recalls;

“I was very close to LL Shah. He used to hug me. He used to participate in ijhangra (the

most popular Punjabi dancc form) during Baisakin (the annual day festival in Punjab) and

give money o f v/hatever denominations he had in his pocket. I will never forget that once he

even donated blood for me.”

LL Shah addressed employees around his age and younger as bbai (brother) and those older to

him as chacha (Uncle). An incident that is quoted by many occurred when he was driving down from

the plant to Delhi and spotted two or three workers standing on the road with their baggage and

waiting for the Delhi bus. He asked them to hop in. Later he arranged a company bus to take

employees regularly to the Delhi bus stand and back.

When LL Shah was running the factory, his younger brother, KK Shah, was Works Director.

After LL Shah’s death, his father took over the day-to-day running of company and groomed his other

son in about two years to take over as the CEO. KK Shah is a young engineer with a modern

worldview. He believes more in systems and procedures than in running the company through

personalized relationships. Unlike his father, he does not chat with managers in the corridor or

employees on the shop floor. He believes that BW needs clear-cut structures, well-demarcated role

responsibilities, and pinpointed accountability. His office, next door to that of his father, has a distinct

identity. It is not open to all. One has to seek an appointment. He sits on a particular place in his sofa,

has a bell to call, and telephones within his reach. However, in case the telephone rings and some one

happens to be there (even a VP), the latter is expected to pick it up and pass it on to him.

Today while the senior Shah is till the boss, it is Kl<C’s dictum that rules BW. Decisions not

initiated or approved by him, are not taken seriously. An incident might illustrate the position. The

VP (Marketing) got a sanction from him to hire 60 to 70 persons and referred it to the VP (HR). The

VP (HR) felt that the number was too high; but all he said was, “Well, the CEO has approved. So, it

is OK.” He, however, subscribes to his father’s pragmatic and down-to-earth approach. Although

BW-India has a liberal advertisement budget and gets a host of film celebrities to promote its brands,

KK Shah does not see an immediate need for either building a new more impressive corporate office,

or a company plane. It is the brand name, according to him, that carries BW in the market.

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4.4.3.2.2 Grapevine-driven Slruciure

T!ic cliairman has established a culture of receiving information through hia favorite employees.

His office is open to all, no employee needs a prior appointment. As aenior-junior communication

channels remain clogged, the grapevine is resorted to for the gaining of information tlirough one’s

favorite juniors about what is happening in the company and who is doing or saying what about

otliers. In I'eturii, undue favoi's are conferi'ed on favorites in terms of jiositive appraisal, special

assignments, easily sanctioned leave applications, recommendation for promotion, and so on. This

naturally gives rise to all kinds of suspicions and heartburn in others left out o f the in-group. They

become more concerned about their own self-interest.

4.4.3.3 Human Resource Practices

T'he HR Department looks after personnel functions and conducts behavioral training programs. Some

HR practices are transplanted from Japanese practices like recruitment (discussed in the following

section), 5S, daily meetings, quality circles, community development activitfes and so on. However,

many employees at both locations expressed lack of clarity of roles and responsibilities. This was also

seen to cause misgivings between, as well as within, departments.

Promotions do not result into role and responsibility enhancement. An HR executive at one o f

tlie plant shared an incident saying that, “one has to do certain things, which are not part o f one’s

i-esponsibilities” — he had been asked to search for general knowledge questions.

The HF -D manager’s role is restricted to personnel matters — for example, HRD initiated the

practice of delineating the Key Result Areas (KRAs) for managers in order to enable them to set

annual objectives so that they may be properly evaluated by their immediate superior. However, old

ways persist and managers do not take it seriously. Moreover, they suspect that even if they do

accomplish all KRAs, they may not get the desired rating.


B W-hidia has adopted the Japanese approach of hiring: it hires fresh graduates and trains them on the

job. Loyalty to BW-India and their learning and perfecting the skills to run the machines is more

important than IQ. Graduate engineers undergo a technical test. A panel consisting o f departmental

heads and a HR representative conduct interviews and make other recruitments. Until recently, MBAs

from prestigious management institutions did not have a significant place in the organization becaiuse

BW-India did not offer a fast track career growth path. BW-India did not need them either. However,

237


this trend is gradually changing under the leadership of the younger Sliah, whose prior approval is

needed for any recruitment,

Actually, many recruitments are based on the recommendations of tlie two Shahs. Once a person

approached the plant HR manager for a job with a reference letter from the head office. The manager

examined his credentials and asked him to join as a freslier, but was told, ‘i have permission from t:he

licad office to be treated as an experienced person.” The manager was furious at this reply and said,

“Forget your refeiral. You can discuss this matter witli the chairman or the CEO now,” In another

case, a summer trainee in HR was also taken on the recommendation of the CEO despite tlie fact that

she did not qualify in terms of knowledge.

Instead of iiiring local people, workers (only ITI-trained) were recruited from different parts of

the countiy so that they would not gang up against the management on caste lines or due to local

influence. The office boys are all casual labour supplied by contractors.

There are five committees o f which the Culture Building Committee is expected to motivate

workers to keep the uniform clean, maintain basic eticiuette, respect elders, not use abusive language,

attend telephone calls, and so on.

4 .43 .3 .2 Training

Training is not systematically designed. Initially, the chairman did not believe in training except

in those skills that employees needed to operate the machines and the skills they further needed to

supervise other employees.

Some managers are sent to Japan for a six-month long training. They mostly go tinder the

Association for Overseas Technical Scholarship (AOTS) program. During training, their entitlement

(travel by executive or economy class) is determined by their position in the company. Before leaving

for Japan they have to learn Japanese for three months. In many cases the training continues for two

to three years. Some vendors are also sent for training. Technical training is organized in various

departments.

There is a management course called Japanese Management Association Manual (JMAM),

which has capsules on Kaizen, personality development, and so on. The JMAM course carries some

weight at the time o f promotions or increments. There is a 15-month course on general management

development where BW-India pays half the fees and the trainees have to pay the other half.

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Workers get a week’s training, followed by a month’s training on the job. The nature of

induction training varie.s from level to level and is given to operators while staff gets orientation

training. During induction training, operators are taught how to handle the machines, while in

oiientation training, employees are taken to different departments where the departmental and

sectional heads tell tliem about their functioning. Then there are other training modules such as team

building among operators, fn addition to this they receive training cibout quality circles, safety and 5S.

Generally technical inputs and training about quality circles and 5S are given to employees at the

[>lant. The very first batch of workers received training from a Japanese manager,

4.4.33.3 Performance Appraisal

Managers and above appraise themselves annually and then are appraised by their seniors.

Senior managers’ appraisals are sent to the Chairman. During self-appraisal, executives and engineers

list tlieir major functional responsibilities and the significant contributions they made during the year

and the factors that facilitated or hindered their achievements. They also suggest future plans ibr

improving their performance, their training needs, need for changing job assignments, and the

qualities that they plan to improve further. Their seniors also rate them for fheir job knowledge,

interpersonal skills, performance, initiative, decision-making capability, leadership qualities, and

integrity. They report on the activities that they have performed during the year, but there is no

system to set targets in the beginning o f the year. This Researcher’s impression was that, despite this

elaborate system, managers are not veiy serious about the appraisal, They felt that appraisal reports

are not used while granting promotions or incentives; personal connections or subjective evaluation

get more w'eightage.

4.4.3.3.4 Target, Performance Orientation and Quality Circles (at the plant)

Production targets are the main concern at the BW-India plant. All systems and procedures are

geared to realize higher and higher levels of targets. The demand for each model is forecast annually

taking the future market, seasonal variations and other trends into account. Then the demand is

updated on a monthly, daily and hourly basis and batches are decided accordingly.

Targets are revised every month as per market feedback. The targets for the next day are set the

pi-evious evening by the production division in consultation with the line supervisors for the different

product lines. Morning meetings are conducted at all levels, at the plant and directions are given

about work for the day. Departmental heads meet before shifts end. There was no concept o f open

meeting at the operator's level. Workers were of the view that “if we try to interact in meetings at

239


operator level vve would be fired because the management would think that vvc were trying to create a

union,”

In light of the target pressure, executives and workers experience more stress than employees at

tlie head office. One oftlie workers said because ol'target pressures it was difficult to get leave. It was

observed that the head of the assembly line at the plant kept moving down the line, scolding operators

fbr committing an error or for any kind of delay in work. He also kept track of the targets,

Tliere was another incident wlien there was a shortage of raw material and the production manager

was feeling stressed. The AGM production was then seen pressurizing the manager to meet targets.

The manager later admitted that he felt that the AGM sat in his office and kept giving instructions

without information about shop floor I’ealities.

The plant has the latest technology and a workforce of 107 managers and 1023 workers, and a

target of about 2,200 motorbikes. The targets are increased even up to 7,000 motorbikes, if the market

so demands.

Quality circles are formed only at the plant and have yielded results such as the redesigning o f a

trolley. Each department has to have a quality circle and written material is provided to departments

to conduct quality circles. However, it was observed that many workers and executives saw quality

circles as a “flop show”, and most did not follow the rules of the circle.

4 .4 .33 .5 Compensation

The pay packets for workers (Rs. 18,000 to 20,000 per month) are quite attractive. Further, there

is an incentive plan according for members of the group that exceeds the daily target. Then, there is a

scheme of giving housing loans on easy terms, and a host o f other facilities that have rendered them

more receptive to job demands. BW-India has a tie up with a reputed ho.spital chain and the medical

allowance is merged with the salary. There is a permanent doctor at the plant.

On the first of every month, the senior VP (Operation) distributes awards to employees up to

senior engineers for outstanding achievements and useful suggestions. The awards vary and are given

in kind as well as in cash up to Rs. 10,000. Gifts are also given during this meet to those who are just

married.

Coupled with non-work practices, the service conditions are so attractive that hardly any worker

wants to leave the company. The worker turnover rate is about 0.50 per cent while the manager

turnover rate is higher at four per cent.

240



Employees live close to the plant. I3iises collect tliem from various points and bring them to the

|)laiit and later reach them home.

The Crtnleeri Committee looks after the quality of food and related matters. The canteen serves

nice, simple meals. Initially emjiloyees of all ranks in the factory premises were expected to eat the

same food in the same cantccn. But then, later on two separate canteens had to be establislied, one for

woi'kers, supervisors, and managers of tlic sliop floor, and another for senior managers and above.

Although the main dishes arc the same, a simple sumptuous Indian meal, a few additional dishes sucii

as .soup and sweets are added in the senior managers’ canteen. Workers were a.sked about their

perception about food served in the canteen. T’heir reply: satisfying. Music is played during the liuich

hoiii’ and restrooms are common for all,

4.4.3.3.7 Suggestion Schemes

The suggestion scheme was not too successful. Flowever plant employees do participate

sometimes.

As is evident from the foregoing section on non-work practices, they are not getting due

attention in the organization. The chairman found it a waste o f I'esources taking employees for

picnics, movies, or initiating any such activities.

4.4.3.3.8 Reluctance in Granting Leave

Permissible leave consists of 10 days sick leave, 10 days casual, 21 days earned leave for senior

managers and 30 days for juniors. Those who reach late for duty have to take half-day leave, but this

rule is applicable mostly at the plant. However, according to a worker, “it is tough to get leave.”

Anotlier worker said “all of us tell lies to get leave,” Managers also opined that it was a big hassle

because of which many people did not bother getting it sanctioned in advance but only informed over

the phone,

4 .43 .3 .9 Other Schemes

There are number of other systems and norms to create good working conditions. No one is fired

unless found to be corrupt.

BW-India runs a school and dispensary Ibr the local community along with a vocational training

center, a handicap welfare center, and similar other community welfare schemes such as installing

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cirinkiHg water pumps, blood donation canijis, etc. BW-lndia has also adopted 11 villages around a

plant for improving tlie sewerage systems, installing water pumps, biogas plant, and imparting

vocational training to women for self-employment, etc.

4.4.3.3.10 Overall impression o f HR

l lie overall impression about HR was not very inspiring. As observed earlier, the manager FIR

was seen speaking rudely to workers. A junior level executive was overheard telling a management

trainee “our assistant manager HR is very strict and aggressive.” However, the CEO is coming to

realize the significance of HR and had started some initiatives.

4.4.3.4 Non-work Praclices

Hie first name culture does not exist widely at BW-India— people address each other’s as

Sir/Mr. or by the first name if a peer/junior. Peons and telephone operators are unifbrmly addressed

as "Bhaiya'. Peons undertake many tasks such as photocopying, and if anyone is seen using the copier

on their own it is immediately suggested they call a peon. Music is played during exercises at the

plant and again at limchtime and switched off soon after.

4.4.3.4.1 Clean yo u r Desk

Peons do the cleaning and security guards supervise them. If a manager cleans his own table, one

of his colleagues is likely to comment to him: “Why can’t you ask for a peon?” However, in Japan

everybody is expected to clean his or her workplace.


Unlike other multinationals, there is no system of self-service of tea and coffee. Office boys are

liired for the purpose. They serve staff and managers in disposable cups and the VPs in bone china

cups and saucers.

4.4.3.4.3 Dress Code

Those who work at the head office are not expected to wear uniforms.

Pennanent employees from the level of operators to MD and CEO are supposed to wear a white

uniform. Temporary workers and helpers get three sets of either a gray or a blue uniform. The MD

and CEO have sets of fresh uniforms kept at their offices at the plant but do not wear these most of

the time.

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4.4.3.4.4 Morning Prayers and Exercises

Mofning prayer and e.\ercise are conducted at the plant only, not at the head officc.

All employees at the plant gather at one place for prayer and exercise. Many employees, however,

dislike it and do not participate properly. Tliey think such things are for children. Many, particularly

operators, argue that they get enough exercise on the production line. Female employees do not

{larticipate. The Japanese join but generally stand quietly without engaging in either prayer or

exercise.

(Note: Wherever there are no frequencies given i71 hradcets, the frequency is one)

Managers

Positive NegativeNot bad. People do it as part of their job.Feel fantastic. Have to because MD and seniors do it.

Feel at home—this develops discipline in the organization

People make fun of us.

It is fine and reflects self-discipiine. I feel bad doing it.Used to feel odd in the beginning but now we are used to it.

Workers

Good ibr us because of nature of job. (2) We do exercise throughout the day so we do not need it.

It is odd to do it but it is a good practice. Used to like it in the beginning, now I do not like it.Felt odd, as if I was back in school but now it is okay.We are bound to these exercises, we have to do them

A morning meeting is also held at the plant to take stock of the performance on the previous day and

the targets for the day, Moming meetings are a Japanese practice. However many of the workers do

not like having meetings every day.

Besides the m om ing meeting, a second hour-long meeting b held at the end o f the shift, in

which departmental heads discuss all issues relating to daily operations. The senior VP and

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GM (Operations) also hold a monthly meeting with the representatives o f workers to discuss

grievances.

4.4.3.4.5 Birthdays, Annual Get-togethers

'T'here is no streamlined system for birthday celebrations. Workers at the plant celebrate at the

personal level with gifts and sweets. The HR department reminds other departments about birthdays

and congratulates employees through an electronic information boaixl. The departmetits celebrate the

birthdays of the workers. As mentioned earlier, there are five committees — a Cultural Committee,

Culture Building Committee, 5S Committee, Sports Committee, and Canteen Committee — to

motivate employees and involve them in most of the activities happening at the plant. The Cultural

Committee organizes a family day during tlie first two or three weeks in January. They visit the plant,

all get free food, then there are games, a quiz, a slogan competition, and so on. The Sports

Committee organizes both indoor and outdoor sports. Indoor sports are played regulariy and an

anniial competition is held in December ibr outdoor sports.

4.4.4: In te rac tio n across In te rn a tio n a l boundaries

4.4.4.1 Interaction with expatriates

The data was also content analyzed to arrive at various categories and found significant behav'ioural

attributes and patterns of interaction with expatriates. The data is discussed on the following

dimensions:

4.4.4.1.1 Task Orientationi) Knowledge and skill





ii) People Orientation / Informal Interactions


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4.4.4.1.1 Task Oricnlallon i) Knowledge and Skills

Japanese are respected For iheir technical knowkxlge. One of the workers said, like to interact

v/itii Japanese because they start explaining while working with us”.

a) Controlling Orientation

Japanese tend not to impose tlieir suggestions or views on theii- hidian counterparts. Their style is

to ask questions and keep asking till a solution is anived at. They ask "too many” whys. After

exploring tlie "whys' of a problem for a few rounds, hidians stop and tend to take whatever option

looks right to them.

Although they I'eniain present on the shop floor, they interact only with sectional and

depai tmental heads.

flij Action Orientation

•lapaiiese expatriates are very systematic and plan everything to the minutest detail. Whenever an

expatriate leaves for Japan, BW-Japan sends a replacement well ahead o f time, about three to four

months in advance. According to one manager: “Even for a party, they plan the way they plan for the

disaster management of say an earthquake or a big fire. If they have to add 2 plus 2, they use a

calculator.” However, Indians are seen to be far superior when it comes to fire-fighting skills— taking

swift decisions in a crisis.

According to a senior manager: “Give a difficult task to an Indian and a Japanese. The Indian

will start working on it within five minutes, but is likely to nin into problems because he did not

understand it properly. The Japanese, on the other hand, might take 40 minutes to understand it, but

then he will complete the work perfectly. At times, they sit silently for a while thinking about a

problem and then make a decision. But once a decision is made, implementation is very quick and

efficient. They also do not like chatting during work hours.”

The plus point of the .fapanese way o f elaborate planning and structuring is that work gets done

smoothly. The minus point is that if BW-India wants to raise the targets for a day, week, or month, it

cannot, because all the inputs from Japan take about three or four months to arrive, after much cross

checking. As Japanese are very particular about quality, whenever Indian vendors are short listed,

their samples are sent to Japan for a quality check up. On the contraiy, the Japanese samples are

generally accepted. However, whenever .bpanese spares are found to be defective, the Japanese

Director (Technical) gets in touch with the Japanese suppliers.

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iv) Formal Worli Practices

'I’lie Japanese do not piitich cards and enjoy a double salary (receiving a salary in both countries).

They arc posted in India at senior levels. The Japanese have transplanted their work practices to

erisure tlie quality of the product like 5S, quality circlc.s, committees on plant, a common wliite

unitbrm tor all, just-in-time, common parking, common rest room, open office, morning prayer.s,

exercises, and many others—some successfully, otht:rs not so successllilly.

Most employees complain of having “too many meetings” before coming to the final decision. In

keeping with the Japanese penchant for quality, whenever Indian vendors are short listed, their

samples are sent to Japan for quality check up. Japanese samples are generally accepted. However,

whenever Japanese spares are found to be defective, the Japanese Director (Technical) gets in tooch

with the Japanese suppliers.


Many managers revealed that Japanese appear to be very shrewd and greedy businessmen, who

are “even concerned about the number of cartons used while shifting”. However, according to them,

tlie Japanese tend to mix more freely than Koreans. They bow and smile even to casual visitors. If

they get very upset at a meeting, they are likely to walk out rather than arguing back.

They generally learn a few words o f Hindi sucli as namaste, however, because they do not know

Hindi, situations are at times created that are embarrassing to both Indians and Japanese. Some of the

Japanese expatriates have picked up some English, but do not like to speak in English, lest they make

mistakes. Because o f the language constraint, they invariably resort to their body language that, to a

few, seems aggressive. According to some, they are short tempered and impatient if the work does not

progi'ess smoothly. The Japanese do not directly interact with workers.

If it is a new ilea, they will not implement it, even if they are convinced, unless the parent

company approves it. Japanese expatriates were also seen to lack fire-fighting skills that Indians have.

The overall impression about Japanese expatriates is mixed. They are respected for humorous

interactions, technical knowledge and systematic way of working. However they are not appreciated

for their interrogation, shrewdness and suspicious attitude towards Indians.

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An [ndo-Japanese M NC 4.4

ii) People Orieiitation/biforinal Intemctions

Tlic Japanese participate in Indian family get-togetliers. They I'calize the importance o f familial

ethos. (Jnc executive recalled, “we used to live like a family and share jokes with the .lapanese.”

According to ati Iridian lady, the Japanese Technical Director made it a point to call her home and ask

liow slie was whenever she was sick. Once she had to stay in the plant, he called up her fatlier and

assured him that she would be dropped home. After her marriage, he saw to it that she left office by 5

p.m. Once when she had to get surgery done, she was allowed to avail as many days of leave as was

po.ssiblc. There were similar other reports about Japanese making inquiries about employees’ family

matters. Both Jtidians and Japanese share a similar familial ethos.

Hi) Indian View on How Expatriates Perceive Them

They are seen as being suspicious of Indians and do not share their technical know-how. Also,

whenever Indian engineers visit Japan, they are shown the R&D set-up, but not crucial sections of it.

4.4.4.2 Relationship with the Parent Company

BW-India has vertical linkages with the parent company in Japan. There is no plan as yet to

develop a cadre of global managers from India. Japanese managers are therefore placed in India.

Whenever a Japanese expatriate finishes his India posting, BW-International sends a repiacement well

ahead of time, about three to four months before the former leaves, so that the substitute may replace

the outgoing person smoothly.

The Japanese partner, BW-International, has brought the latest technology and quality levels of

global standards to the joint venture provides the latest technology. However, it never allows BW-

India (or in fact any partner anywhere in the world) to find out the core secrets o f its technology.

Hence, R&D activities are very highly integrated with the R&D of BW-International. Senior

managers feel that R&D-India has the potential to design substitute components, but the agreement

with BW-hiternational does not allow it. They can suggest some alterations in design, but are not

permitted to make major changes in flindamental design. Even for nrinor changes the consent of BW-

International is necessary. About 90 per cent of the components are indigenous. 'Fhe rest are imported

from Japan. But they are the ones that are most crucial. Similarly, marketing is also highly integrated

with the policies o f BW-International. Thus, manufacturing is largely determined by the foreign

partner.

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At l,}W-liulia, tlie Indian partner looks al'ter day-to-day operations like handling HR, niai'keting

and salcK. I ’he Indian partnei" Ijanks strongly on building close relatiotisliips with vendors, dealers,

customers, and workers and targets were decided based on market feedback,

4,4.4.3 Japanese Practices Transplanted in India

Despite a similar background in manufacturing vehicles, complementary strengths, and sharing

of the Asian mind-set, negotiations to establisli the joint venture took about a year-and-a-half. BW-

hiternationars philosophy of the three happiness’s — happiness in making, in selling, and in buying

- was close to the Indian chairman’s licart. He, in turn, provided a sound fmancial base as well as a

network of dealers and vendors who are personally attached to the company.

A number of Facets of the Japanese style of management have been introduced in BW, like 5S,

quality circles, committees at the plant, a common uniform at the plant, the just-in-time concept,

common parking, common rest I'oom, open office, morning prayers, exercises, and much more; some

successfully, others rather unsuccessfully, as discussed earlier.

The Japanese are very finicky about cleanliness and punctuality. An instance was often quoted

about a Japanese Director cleaning a part of the shop floor. If they find anything lying on the floor,

they habitually pick it up and put it in a dustbin.

The Japanese way of just-in-time is another measure that has been in use from the Indian partner

even before the merger. As vendors and suppliers are located nearby just as in Japan and since drey

are mostly relatives, family members, and friends of the Indian partner’s family, they deliver spares

within three to four hours. However, at times, the quantity is not sufficient. Japanese spares, on the

contrary, take at least three months time. They enforce PDCA:

P = Plan

D = Do

C = Check the products

A = Act i.e., deliver.

Employees, especially operators, do not get a chance to work in difterent sections. As per

Japanese management practices, job rotation is not advisable because mastery in one job enhances

quality and speed.

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An Iiido-Japanese MNC 4.4

4.4.4.4 Persistence o f Traditional Indian Values

According to a senior manager: “BW is a family run company - hierarchical, status conscious,

command and control oriented, conservative, and lacking in creating opportunities for people to take

initiative.” Another senior manager said, “employees arc not empowered, roles and responsibilities

are not clear." Indian managers also appeared to feel that liuman resources are not properly managed

in IJW.

Organizational practices have an impact on the employees’ attitude towards the work, processes,

and the organization.

O rganizational cultisre a t BW-Iiidia can be eliaracterized a.s h iera ix liy driven, status

coii.scious, w ith a centralized mode of decision-m aking and engeMdering efficacy through

conditional personalized relationships. Mo.st executives believe th a t im p o rtan t decisions are

made a t the top.

T'he following section culls out the status of the employees’ commitment towards the

organization.

4.4.5 OrgJinizatioHJi! C om iiiltm ent

BW-India is a unique in that employees identity with the company and many have been working

there for the last 10-15 years. The turnover i'ate is quite low, However, employee commitment

towards the organization cannot be evaluated positively on the basis o f long association with the

company. Their involvement is questionable. As discussed earlier, neither have the employees been

given role clarity nor do they own responsibility. Most would like to be in the good books of their

seniors and, therefore, divulge information and in return look for some personal favors.

Respondents revealed that given a chance most employees would leave this company, Most

employees, especially young professionally qualified statT, consider BW-India a launching pad for a

better job. Most senior employees have grown with the organization in terms o f promotion, and

remuneration. Also many employees are not professionally qualified; they are close associates of

Shahs.

Thus, the nature of corainitment can be called ‘‘Calculative Commitment. Calculative

commitment can be explained as employee association with the organization as subject to the

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j,)C'rs««ai benefits and favours gained by networkimg. Keeping in view the overall da ta , the

coinanitmeiit level does not ap p e a r to be very encouraging.

4,4.6 O rg a n iz a tlo n a i E ffectiveness

The majority oT managers report that tiie company has a good position in tlie mai'ket due to

good |)rodiict quality and technology; most employees feel that BW-Iiidia’s strcngtli is its product

tecliiiology. Tliis hel[)s to retain market position, profits, sales and growtli. Most executives feel that it

the comjiany adapts to the clianging environment, has a secure future in hidia and has the latest

technology. P'urthei'more, managers reported that BW is doing well on product quality and profits but

lacks on manpower-manageinent.

A majority of managers appreciate the sociable face of the organization. They accept that the

company invites all families on special occasions and extends help in times of need as well as on

occasions such as a marriage etc. To reciprocate, workers take pride in working for the company, and

the employee turnover rate is low.

However, a substantial percentage o f managers believe that the formal work systems and

processes are ignored and work and communication suffer from favour‘ism’ and a grapevine-driven

structure. Tliey deny that policies of recruitment, training, placement, promotion, etc. are strictly

followed, pay and perks depend on one’s performance, promotions are based primarily on

Ijerformance appraisal, and those who do not perform are eased out. Managers maintain a large

distance, and do not delegate authority to their juniors. Some younger executives especially indicate

that there are many managers looking for better prospects elsewhere. An executive said he would like

to see changes in the work culture. Another manager said he rated BW as being moderately effective

due to lack of objective evaluation of performance. He added, “We are able to achieve targets because

of incentive schemes.”

Thus, the organizational effectiveness of BW-hidia has been summed up well by most

respondents, who felt that BW is a highly effective organization from the external criteria point of

view (such as adaptability as per market needs, financial status, profits, customer responsiveness) and

least effective from internal factors of effectiveness (such as work culture, developing people

competencies, inter-departmental relations, open communication, transparency). One of the

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executives said that, people should grow with the organization. As one executive said, “They should

(icvi-lop people along with the organization.”

BW-hiclia is perceived as a moderately effective organization from the goal perspective and

o|')en .system approach. In order to sustain itself in the long run, the organization would need to talce

care of employee needs and sliould focus on two models: (1) the Human Relation model (pay more

attention to developing employees, respecting the workforce, and create a conducive wor'k cultuce).

(2) The Internal process model (which focuses on u well organized information system, open and

two-way communication, role clarity and professionalisnf).

In Siini

I3W-India provides a unique case where the production processes are handled in

technologically efficient ways while the human resources are m anaged in traditional value-

driven ways. Under the given scenario o f control systems, centralized decisioi>-making, non-

proactive workforce, it would be a challenge for B W -India to re.store profits, growth and

brand image in the long run.

It is felt by this researcher that in order to sustain the height o f success, the organization should

empower its employees by delegation of authority and decentralized decision-making.

Based on the case it is conjectured that it may not be possible to transplant foreign practices

fully. The Researcher feels it is not entirely desirable either. HR departments should develop

01’ adopt an ‘internal custotner’ orientation to become more accessible and friendly towards

employees. This could help to build unconditional commitment towards organizational goals.

However, t te attitude o f the top management plays an im portant role in building

organizational culture. More power and authority should be delegated to the plant for better

functioning. However, the chairm an’s paternalistic style o f relating to his employees and

vendors or dealers is appreciable.

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cfiapter-4; data sliariiig; case studies -...

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